NEW YORK (AP) — Telecommunications company Zayo Group says it will acquire AboveNet Inc. for $2.2 billion. Both companies offer Internet and phone services to companies over fiber-optic networks.
The news sent AboveNet's shares up more than 13 percent in morning trading Monday.
AboveNet's CEO said the combination of the two companies' fiber optics networks will better provide bandwidth services for customers. AboveNet serves government customers and the data-hungry financial, media and health care and Internet industries.
"Over the last five years Zayo has acquired a very impressive set of fiber infrastructure assets," said AboveNet CEO Bill LaPerch. "The combination of AboveNet's and Zayo's assets creates a dense fiber footprint throughout North America and Europe for a bandwidth hungry world."
AboveNet shareholders will receive $84 per share in cash, a 13 percent premium to the stock's closing price on Friday.
AboveNet's shares gained $9.88, or 13.3 percent, to $84.13. Shares had ranged from $49.79 to $78.07 in the past 12 months.
White Plains, N.Y.-based AboveNet will have 30 days to solicit other offers.
As part of the deal, private equity firm GTCR will also invest in privately-held Zayo Group, based in Louisville, Colo.