Zayo Group today announced it has entered into an agreement to acquire Intelligent Fiber Network (IFN), an Indiana fiber provider, which operates a 5.0k fiber route mile network. Intelligent Fiber Network was formed in 2002 and is owned by 21 Indiana local exchange telephone companies and one rural electric cooperative. Specifically, Intelligent Fiber Network serves over 400 customers across multiple markets in Indiana. Indeed, these markets include Indianapolis, Fort Wayne, Columbus, Terre Haute, and South Bend.

Zayo Group is a portfolio company of Digital Colony Partners I, a $4.0bn private equity fund managed by Colony Capital, as well as EQT Infrastructure. Zayo expects to close the Intelligent Fiber Network transaction during the second half of 2021.

Intelligent Fiber Network (IFN) – Business Overview

Intelligent Fiber Network provides high-speed fiber-optic backbone capabilities to telecommunications providers and enterprise customers including hospitals, schools, and government facilities.

Zayo Group Intelligent Fiber Network IFN Indiana Map
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Specifically, the company’s three key business lines are Fiber Transport, Internet Access, and Colocation.

Fiber Transport

Intelligent Fiber Network provides transport services through its backbone fiber routes, dedicated partner routes, and particular customer expansions. Specifically, the company’s fiber connects to more than 4.0k on-net buildings throughout Indiana. Additionally, Intelligent Fiber Network provides national connectivity through carrier hotels and is partnered with INDATEL (a membership of wholesale carriers) to fulfill nationwide networking needs.

Internet Access

Intelligent Fiber Network offers internet access to enterprises through its fiber-based Ethernet network. Specifically, services range from internet access options of 5 megabits per second to 100+ gigabits per second.

Colocation

Intelligent Fiber Network delivers colocation services to enterprise customers and carriers through its carrier-neutral data center in the Indianapolis Carrier Hotel on Henry Street. Notably, the owner of this carrier hotel is DataBank, which Colony Capital owns a 20% interest in, through its balance sheet.

Transaction Rationale – Zayo Group

Intelligent Fiber Network’s combination with Zayo Group adds another unique and dense regional fiber network to Zayo’s portfolio. Indeed, Zayo’s current fiber network will grow from 126k fiber route miles to 131k fiber route miles, following completion of the transaction.

Furthermore, of Intelligent Fiber Network’s 4.0k on-net buildings, nearly 1.0k will be incremental on-net buildings that add to Zayo. Overall, the IFN acquisition aids Zayo’s efforts to accelerate growth in Indiana, particularly within the enterprise fiber segment.

Transaction Advisors – Zayo Group and Intelligent Fiber Network (IFN)

Skadden Arps is serving as legal counsel to Zayo in connection with the transaction.

Houlihan Lokey and Stifel are acting as financial advisors to Intelligent Fiber Network. Additionally, Dentons Bingham Greenebaum is serving as the company’s legal advisor.

Jonathan Kim covers Fiber for Dgtl Infra, including Zayo Group, Cogent Communications (NASDAQ: CCOI), Uniti Group (NASDAQ: UNIT), Lumen Technologies (NYSE: LUMN), Frontier Communications (NASDAQ: FYBR), Consolidated Communications (NASDAQ: CNSL), and many more. Within Fiber, Jonathan focuses on the sub-sectors of wholesale / dark fiber, enterprise fiber, fiber-to-the-home (FTTH), fiber-to-the-premises (FTTP), and subsea cables.

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