Zayo To Buy FiberGate in Dark Fiber Deal

By Josh Long

Continuing a long streak of acquisitions, Zayo Group on Tuesday announced an agreement to purchase FiberGate Inc., a Washington, D.C., metro area provider of dark fiber services.

Louisville, Colo.-based Zayo said the acquisition adds 130,000 fiber miles to its metro network in and around the nation’s capital. FiberGate also is directly connected to 315 buildings and recently expanded to Baltimore and Frederick, Md.

“The Washington, D.C. / Northern Virginia area is a uniquely important geography for government, data centers and Internet connectivity,” said Dan Caruso, Chief Executive Officer of Zayo Group, in a statement.

The acquisition is expected to close in the third quarter. Zayo didn’t reveal the value of the deal, but said it expected to fund it with cash on hand.

“The simplicity of FiberGate’s business model combined with its excellent inventory data makes it a straightforward business to integrate,” Caruso said.

The fast-growing Zayo anticipates closing its $2.28 billion acquisition of AboveNet this summer. The AboveNet merger will significantly increase the size of Zayo, which reported its first-quarter results last month.

For the three months ending March 31, the company reported a net loss of $2.7 million on $105 million. Zayo incurred capital expenditures of $42.7 million, and those expenses included adding 250 route miles and 238 buildings to its network.