BCE to acquire Ziply Fiber, accelerating its fibre growth strategy across North America
BCE announced its strategic acquisition of Ziply Fiber, a leading fibre network operator in the Northwestern United States, for $3.85 billion USD. The transaction includes the assumption of debt and marks BCE's expansion into the U.S. market. Ziply Fiber operates a 83,000 route-mile fibre network serving 500,000 residential and commercial locations across Washington, Oregon, Idaho, and Montana. The acquisition aligns with BCE's growth strategy and is expected to be EPS and free cash flow accretive in the first year post-closing.
BCE ha annunciato l'acquisizione strategica di Ziply Fiber, un operatore di rete in fibra leader negli Stati Uniti nordoccidentali, per 3,85 miliardi di dollari USD. La transazione include l'assunzione di debito e segna l'espansione di BCE nel mercato statunitense. Ziply Fiber gestisce una rete di fibra di 83.000 miglia rotaie che serve 500.000 abitazioni e locali commerciali in Washington, Oregon, Idaho e Montana. L'acquisizione è in linea con la strategia di crescita di BCE e si prevede che contribuirà all'EPS e al flusso di cassa libero nel primo anno dopo la chiusura.
BCE anunció su adquisición estratégica de Ziply Fiber, un operador de red de fibra líder en el noroeste de Estados Unidos, por 3.85 mil millones de dólares USD. La transacción incluye la asunción de deuda y marca la expansión de BCE en el mercado estadounidense. Ziply Fiber opera una red de fibra de 83,000 millas de ruta que sirve a 500,000 ubicaciones residenciales y comerciales en Washington, Oregón, Idaho y Montana. La adquisición está alineada con la estrategia de crecimiento de BCE y se espera que sea acreedora de EPS y flujo de efectivo libre en el primer año después del cierre.
BCE는 미국 북서부의 주요 섬유 네트워크 운영자인 Ziply Fiber의 전략적 인수를 38억 5천만 달러 USD에 발표했습니다. 이 거래는 부채 인수를 포함하며 BCE의 미국 시장으로의 확장을 의미합니다. Ziply Fiber는 워싱턴, 오리건, 아이다호 및 몬태나 전역의 500,000개 주거 및 상업적 위치를 서비스하는 83,000마일의 섬유 네트워크를 운영합니다. 이 인수는 BCE의 성장 전략과 일치하며, 마감 후 첫 해에 EPS와 자유 현금 흐름에 기여할 것으로 예상됩니다.
BCE a annoncé son acquisition stratégique de Ziply Fiber, un opérateur de réseau fibre leader dans le nord-ouest des États-Unis, pour 3,85 milliards de dollars USD. La transaction inclut l'assumption de dettes et marque l'expansion de BCE sur le marché américain. Ziply Fiber gère un réseau de fibre de 83 000 miles de route qui dessert 500 000 emplacements résidentiels et commerciaux à travers Washington, l'Oregon, l'Idaho et le Montana. L'acquisition est en ligne avec la stratégie de croissance de BCE et devrait être bénéfique pour l'EPS et le flux de trésorerie libre dès la première année suivant la clôture.
BCE hat die strategische Akquisition von Ziply Fiber, einem führenden Betreiber von Glasfasernetzwerken im Nordwesten der Vereinigten Staaten, für 3,85 Milliarden USD angekündigt. Die Transaktion umfasst die Übernahme von Schulden und markiert die Expansion von BCE in den US-Markt. Ziply Fiber betreibt ein Glasfasernetzwerk mit 83.000 Streckenmeilen, das 500.000 Wohn- und Geschäftsorten in Washington, Oregon, Idaho und Montana bedient. Die Akquisition steht im Einklang mit der Wachstumsstrategie von BCE und wird im ersten Jahr nach dem Abschluss voraussichtlich EPS und freien Cashflow stärken.
- Strategic expansion into U.S. market with 83,000 route-mile fiber network
- Acquisition expected to be EPS and free cash flow accretive in first year
- Access to 500,000 residential and commercial locations across 4 states
- Purchase price of $3.85B USD includes debt assumption
- Significant debt assumption as part of the transaction
- Integration costs and risks associated with cross-border expansion
- Substantial capital outlay required for acquisition
Insights
BCE's strategic acquisition of Ziply Fiber marks a significant expansion into the U.S. market, representing a
The acquisition's 8.0x EV/EBITDA multiple post-synergies suggests a reasonably priced deal compared to industry standards. Expected annual synergies of
This acquisition positions BCE strategically in the U.S. fiber market, particularly in regions with significant growth potential. Ziply's 54% fiber penetration rate in existing markets indicates strong market acceptance and room for expansion. The deal targets areas with fiber competition, suggesting potential for market dominance and pricing power.
The transaction's timing aligns with increasing demand for high-speed fiber connectivity, especially in underserved markets. Ziply's recent network investments and 90% fiber deployment target by 2025 provide BCE with a modern infrastructure platform for future growth. The expansion into U.S. markets also offers geographic diversification benefits and exposure to different regulatory environments.
This news release contains forward-looking statements. For a description of the related risk factors and assumptions, please see the section entitled "Caution Regarding Forward-Looking Statements" later in this release.
- BCE to acquire
100% of equity in Ziply Fiber for approximatelyC ($5.0 billion U.S. $3.65 billion - Acquisition to extend Bell's fibre footprint to
the United States , adding approximately 1.3 million fibre locations - Acquisition to reinforce Bell's position as third-largest fibre Internet provider in
North America with a total of 9 million fibre locations and an objective to reach over 12 million fibre locations by the end of 2028 - Bell to use estimated
C net proceeds from sale of its ownership stake in Maple Leaf Sports & Entertainment (MLSE) towards funding the Acquisition$4.2 billion
This transaction enhances Bell's growth profile and strategic position by giving it a foothold in the large, underpenetrated
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1 Based on total revenue and total combined customer connections. |
"This acquisition marks a bold milestone in Bell's history as we lean into our fibre expertise and expand our reach beyond our Canadian borders. Fibre is at the heart of what we do, and we're proud to connect people and businesses and enable them to do more through our fibre networks. By bringing together Bell and Ziply Fiber's exceptional talent, we'll accelerate our growth while continuing to deliver significant value for our customers and shareholders."
- Mirko Bibic, President & CEO, BCE and Bell Canada
Ziply Fiber's focus on network technology and innovation has resulted in steady expansion of its footprint since 2020, with over 1.3 million fibre locations across four
The combination of Bell and Ziply Fiber will offer enhanced value for existing and new customers in both
"Bell's leadership and vision aligns perfectly with our commitment to improve the connected experiences of our communities through fast, reliable fiber Internet and a refreshingly great experience. This acquisition enhances our growth strategy with the scale and experience of one of
- Harold Zeitz, CEO, Ziply Fiber
This transaction values Ziply Fiber on an enterprise value basis, net of the present value of acquired tax attributes, at approximately 14.3 x 2025 estimated adjusted EBITDA, including run-rate synergies. The Acquisition is expected to close in the second half of 2025, subject to certain customary closing conditions and the receipt of certain regulatory approvals. Once the transaction has closed, Ziply Fiber will operate as a separate business unit and will continue to be headquartered in
The purchase price of the Acquisition is anticipated to be approximately
Upon closing of the Acquisition and the pending divestitures of Northwestel and BCE's ownership stake in MLSE, BCE's net debt leverage ratio is expected to remain relatively unchanged compared to its current net debt leverage ratio. Bell remains focused on maintaining its long-term debt investment-grade credit ratings and to deleveraging over time.
BCE intends to maintain its annual common share dividend at the current level of
BCE is also announcing today that it intends to amend its Shareholder Dividend Reinvestment and Stock Purchase Plan (the "DRP") to provide, at the BCE Board's discretion, for the issuance of new common shares from treasury at a discount to the average market price of the common shares preceding the applicable dividend payment date (the "Average Market Price"). The equity issuance anticipated from implementing a discounted DRP is expected to enable BCE to retain cash to help fund strategic growth initiatives and strengthen the balance sheet.
By participating in the DRP, eligible shareholders can automatically reinvest all or any portion of the cash dividends paid on their common shares in additional BCE common shares, without charge for any commissions or brokerage fees. Common shares delivered to participants under the DRP in reinvestment of cash dividends are currently purchased by the plan administrator on the secondary market with cash provided by BCE.
BCE anticipates that commencing with the dividend payable on January 15, 2025 to eligible shareholders as of the December 16, 2024 record date, and subsequently until further notice, common shares will be issued from treasury at a discount of
A separate press release including additional information will be issued following receipt of approval from the TSX. This communication does not constitute an offer to sell or the solicitation to buy securities.
BCE will hold a conference call with the financial community to discuss this announcement today, Monday, November 4, 2024 at 8:30 a.m. eastern. Media are welcome to participate on a listen-only basis. To participate, please dial toll-free 1-844-933-2401 or toll 647-724-5455. A replay will be available until midnight on December 4, 2024 by dialing toll-free 1-877-454-9859 or toll 647-483-1416 and entering passcode 4188368. A live audio webcast of the conference call will be available on BCE's website at BCE acquisition of Ziply Fiber conference call.
BCE drives innovation with advanced communications, tech services and digital media, connecting people with leading broadband Internet, wireless, TV, media and enterprise solutions. To learn more, please visit Bell.ca or BCE.ca.
Through Bell for Better, we are investing to create a better today and a better tomorrow by supporting the social and economic prosperity of our communities. This includes the Bell Let's Talk initiative, which promotes mental health with awareness and anti-stigma campaigns like Bell Let's Talk Day and significant Bell funding of community care and access, research and workplace leadership initiatives. To learn more, please visit Bell.ca/LetsTalk.
Ziply Fiber is home to America's Fastest Home Internet – 50 Gig. Called "America's undisputed leader as the fastest home internet provider" and "the fastest internet provider nationwide" by CNET, and "The Fastest ISP in the Northwest" by HighSpeedInternet.com, Ziply Fiber is a local, Northwest-based company headquartered in
Media inquiries
Ellen Murphy
media@bell.ca
Ryan Luckin
ryan.luckin@ziply.com
Investor inquiries
Thane Fotopoulos
thane.fotopoulos@bell.ca
Certain statements made in this news release are forward-looking statements, including statements relating to the proposed acquisition by Bell of Ziply Fiber, the expected timing and completion thereof, the sources of liquidity we expect to use to fund the proposed acquisition, certain potential benefits expected to result from the proposed acquisition, Bell's growth prospects, business outlook, objectives, plans and strategic priorities, BCE's expected net debt leverage ratio upon the closing of the proposed acquisition and the dispositions of Northwestel Inc. and BCE's ownership stake in MLSE, BCE's intention to maintain its annual common share dividend at the current level during 2025 and the potential future resumption of common share dividend growth, the maintenance of Bell's long-term debt investment-grade credit ratings and deleveraging plans, potential future issuances by BCE of new common shares pursuant to its intended discounted treasury DRP, the expected timing of commencement thereof and the anticipated benefits expected to result from such equity issuances, and other statements that are not historical facts.
All such forward-looking statements are made pursuant to the "safe harbour" provisions of applicable Canadian securities laws and of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to inherent risks and uncertainties and are based on several assumptions which give rise to the possibility that actual results or events could differ materially from our expectations. These statements are not guarantees of future performance or events, and we caution you against relying on any of these forward-looking statements. The forward-looking statements contained in this news release describe our expectations at the date of this news release and, accordingly, are subject to change after such date. Except as may be required by applicable securities laws, we do not undertake any obligation to update or revise any forward-looking statements contained in this news release, whether as a result of new information, future events or otherwise. The timing and completion of the proposed acquisition of Ziply Fiber are subject to customary closing conditions, termination rights and other risks and uncertainties including, without limitation, relevant regulatory approvals, which may affect its completion, terms or timing. Accordingly, there can be no assurance that the proposed acquisition will occur, or that it will occur on the terms and conditions, or at the time, contemplated in this news release. The proposed acquisition could be modified, restructured or terminated. There can also be no assurance that the potential benefits expected to result from the proposed acquisition will be realized. In addition, the level of BCE's common share dividend, its dividend policy and the declaration of dividends are subject to the discretion of BCE's board of directors. Consequently, there can be no assurance that BCE's common share dividend level will be maintained or increased, that BCE's dividend payout policy will be maintained or achieved or that dividends will be declared. The level of BCE's common share dividend and the declaration of dividends by the BCE board, as well as the maintenance of investment-grade credit ratings and BCE's deleveraging capacity, are ultimately dependent on BCE's operations and financial results, which are in turn subject to various assumptions and risks, including those described in BCE's public disclosure documents. For additional information on assumptions and risks underlying certain of our forward-looking statements made in this news release, please consult BCE's 2023 Annual MD&A dated March 7, 2024, BCE's 2024 First Quarter MD&A dated May 1, 2024, BCE's 2024 Second Quarter MD&A dated July 31, 2024 and BCE's news release dated August 1, 2024 announcing its financial results for the second quarter of 2024, filed with the Canadian provincial securities regulatory authorities (available at sedarplus.ca) and with the
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SOURCE BCE Inc.
FAQ
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