BCE has finalized the acquisition of Ziply Fiber, a move reflecting the trend of private equity firms exiting telecom investments. Investors actively invested in broadband opportunities, aiming to enhance network infrastructure and sell for profit within a few years. WaveDivision Capital and Searchlight Capital previously purchased Frontier operations, ultimately renaming them to Ziply. After only six years, the sale to BCE yields substantial profits. The deal suggests a preference for selling to providers rather than pursuing initial public offerings amidst regulatory challenges.
The news today that Canadian telecom and broadband provider BCE has completed its acquisition of Ziply Fiber marks the first instance of a private equity firm cashing out on a telecom and broadband investment.
Private equity investors have increasingly targeted broadband and telecom sectors, seeking to invest in fiber broadband opportunities with a strategy of quickly selling at profits after enhancing network value.
The sale of Ziply to BCE's Bell Canada subsidiary is valued at $3.65 billion, indicating significant profits for WaveDivision and Searchlight after a brief six-year holding period.
While initial public offerings are one exit route for private equity firms, selling to another provider, as evidenced by the Ziply/BCE deal, may be a more common strategy.
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