Zayo Group Holdings, Inc. (NYSE: ZAYO) said that it has entered into an agreement to sell Scott-Rice Telephone Co. for $42 million to New Ulm Telecom, Inc. Zayo acquired the Minnesota incumbent local exchange carrier (ILEC) as part of its purchase of Electric Lightwave in March 2017.
Scott-Rice Telephone serves residential and business customers in parts of Scott and Rice counties, which are southwest of Minneapolis, MN. The company has been managed separately since the acquisition within Zayo's Allstream's business segment. The company acquired Allstream in 2015 to extend its fiber-optic network services operations into Canada (see "Zayo to buy Allstream for Canadian expansion").
Zayo expects the deal to close in the June quarter of 2018, subject to regulatory approvals and customary closing conditions.
"This transaction represents further progress toward the separation of our Allstream business," said Matt Steinfort, Zayo's CFO. "It is consistent with Zayo's strategic focus on communications infrastructure, and our goal of maximizing the value of our non-core assets."
The deal supports Zayo's recent announcement that it is focusing on expansion by acquiring companies that add strategic assets, which include its January acquisitions of substantially all of Neutral Path Communications and Near North Partners assets, and of Vancouver-based Optic Zoo Networks (see "Zayo's Vancouver footprint grows with Optic Zoo Networks acquisition" and "Zayo acquires Neutral Path Communications and Near North Partners assets to expand North American footprint").
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