The deal provides Zayo with an 825-mile, high-fibre count long haul route between New York and Chicago, and its customers, in particular those in financial services who have trading operations in those cities’ markets, with one of the lowest latency and most direct fibre routes between the two cities and additional physical path diversity.
“Spread constructed this route to provide the fastest possible speed on the shortest possible route,” said Jack Waters, CTO and president of Fiber Solutions at Zayo, who joined the company in August 2016.
“This asset is an outstanding complement to our existing network, providing customers with low-latency options to and from the country’s leading centres of finance and commerce. Given the relative simplicity of the business, this will be a straightforward integration with meaningful, near-term synergies.”
When combined with Zayo’s fibre routes from Seattle to Chicago and San Francisco to Chicago, many other verticals including content, media and cloud providers benefit from the low-latency, coast-to-coast network. Traffic to and from Asia, which connects through cable landing stations in the Pacific Northwest, are also express connected via the combination of Zayo existing fibre routes and the Spread route.
Spread Networks, which in May signed a partnership with Seaborn Networks to become the exclusive channel partner for sales to the financial vertical on Seabras-1, Brazil’s first dedicated ultra-low latency subsea route between New Jersey and São Paulo. In September, Seaborn Networks announced the 72Tb Seabras-1 subsea cable system is ready for operations. The 6-fibre pair cable system is a huge subsea asset, exemplified by Tata Communications recently announcing is expansion to Brazil by connecting carriers and enterprises to and from Latin America using its own global network and the Seabras-1 system.
Spread Networks’ high-fibre count route, which currently serves more than 60 customers, has ample capacity for new customers. Of the 432 fibres available on the route, less than 25% are utilised today and the acquisition provides Zayo with overpull rights and additional conduit. The route connects 755 Secaucus Rd. in Secaucus, NJ and 1400 Federal Blvd. in Carteret, NJ to 350 Cermak Rd. in Chicago, IL, with additional connectivity enabled by Zayo’s existing network. Zayo will use the acquired assets to provide a low-latency wavelength route from Seattle to New York.
Zayo Group, which was recently recognised for its board diversity, has been on a big drive in the industry but particularly over the past year. At the beginning of 2017, Zayo offered $800 million in senior notes ahead of its $1.42 billion takeover of Electric Lightwave, which closed in Q1 2017.
In July, Zayo Group closed its previously announced private offering of $300 million aggregate principal amount of its 5.750% senior notes due 2027, through an add-on to its existing issue. This year has also seen the appointments of former Level 3 Communications executives Andrew Crouch (pictured), as COO, and later Edward Marche, as president of sales.
Construction of a 250 route mile long-haul dark fibre network, connecting Portland and Umatilla, Oregon, began in January. More recently it expanded its Atlanta data centre presence with a 72,100 sq ft facility and began providing Peak 10 customers, initially in seven data centres, with its CloudLink services.
The all-cash Spread Networks transaction is expected to be funded with cash on hand and debt and is expected to close in Q1 2018, subject to customary closing conditions.
