- BCE (TSX:BCE), one of Canada’s largest telecom stocks, is announcing that its Bell Canada subsidiary will acquire Washington-based Ziply Fiber, the leading fibre Internet company in the U.S. Pacific Northwest, for approximately C$7 billion
- Ziply Fiber has grown to over 1.3 million fibre locations across four U.S. states
- BCE (Bell Canada Enterprises) is a communications, tech services and digital media company specializing in broadband Internet, wireless, TV, media and enterprise solutions
- BCE stock has given back 24.98 per cent year-over-year and 35.67 per cent since 2019
BCE (TSX:BCE), one of Canada’s largest telecom stocks, is announcing that its Bell Canada subsidiary will acquire Washington-based Ziply Fiber, the leading fibre Internet company in the U.S. Pacific Northwest, for approximately C$7 billion.
Ziply Fiber has grown to over 1.3 million fibre locations across four U.S. states with plans to surpass three million locations over the next four years. This added capacity positions Bell to grow from 9 to 12 million locations in North America by the end of 2028, fortifying its position as the third-largest fibre Internet provider on the continent. The global Internet services market is expected to surpass US$750 billion dollars by the beginning of the next decade, clocking in at a compound annual growth rate of 4.4 per cent.
The acquisition, which includes C$5 billion in cash (US$3.65 billion) and the assumption of C$2 billion in debt, values Ziply Fiber at 14.3 times estimated 2025 adjusted EBITDA, and is expected to give Bell “a foothold in the large, underpenetrated U.S. fibre market, while increasing its scale, diversifying its operating footprint and unlocking significant growth opportunities,” according to Monday’s news release.
BCE intends to fund the purchase with C$4.2 billion from its divestiture from Maple Leaf Sports & Entertainment (MLSE), with the remainder stemming from a discounted treasury dividend reinvestment plan. The company has a US$3.7 billion fully committed delayed-draw term loan facility in place should the MLSE divestiture occur after the acquisition closes in the second half of 2025.
Leadership insights
“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,” Mirko Bibic, president and chief executive officer (CEO) of BCE and Bell CanadaFibre, said in a statement. “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.”
“Bell’s leadership and vision aligns perfectly with our commitment to improve the connected experiences of our communities through fast, reliable fibre Internet and a refreshingly great experience,” added Harold Zeitz, CEO of Ziply Fiber. “This acquisition enhances our growth strategy with the scale and experience of one of North America’s leading fibre operators. I’m also grateful for the support of our original partners at both Searchlight Capital and WaveDivision Capital.”
About BCE
BCE (Bell Canada Enterprises) is a communications, tech services and digital media company specializing in broadband Internet, wireless, TV, media and enterprise solutions.
BCE stock (TSX:BCE) is down by 9.26 per cent on the news trading at C$40.66 per share as of 11:28 am ET. The stock has given back 24.98 per cent year-over-year and 35.67 per cent since 2019.
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(Top photo of Ziply Fiber Internet hardware: Ziply Fiber)