Zayo to issue $800m in senior notes for acquisition

By:
James Pearce
Published on:

$1.42bn takeover of Electric Lightwave was announced in December and is set to be close in Q1

Zayo Group plans to offer up to $800 million in senior notes ahead of its $1.42 billion takeover of Electric Lightwave, which is expected to close in Q1 2017.

The operator said it will use the net proceeds from the bonds, along with money from an incremental term loan, to fund its acquisition of the US fibre provider.

The North American firm stated its plans to enter into a seven-year loan agreement worth $2.5 billion, of which £1.85 billion will be used to pay of existing debts.

The senior notes will not be registered under the Securities Act, and will be offered only to qualified institutional buyers in the US.

Zayo unveiled its takeover plans in December, saying it anticipated significant revenue growth and savings of more than $40 million per year from the deal.

Electric Lightwave, formerly known as Integra Telecom, provides infrastructure and telecom services primarily in Western US and has 8,100 route miles of long haul fibre and 4,000 miles of dense metro fibre in Portland, Seattle, Sacramento, San Francisco, San Jose, Salt Lake City, Spokane and Boise.

“Electric Lightwave provides us another unique and dense regional fibre network that advances our position as the only national independent infrastructure provider remaining in the US,” said Dan Caruso, chairman and CEO, Zayo, at the time of the announcement. 

“Electric Lightwave has both strong metro fibre assets in key West Coast markets and capacity and routes that will augment Zayo’s intercity footprint.”