Zayo Group and TPG Compete for Crown Castle’s Fiber Assets

By Milana Vinn
NEW YORK (Reuters) – Fiber network owner Zayo Group and buyout firm TPG are competing to acquire the fiber and wireless assets of Crown Castle (NYSE:CCI), in a deal valued at nearly $10 billion, according to sources.

Zayo, owned by EQT AB (ST:EQTAB) and DigitalBridge, and TPG are the final bidders for Crown Castle’s fiber and small cell business, which provides wireless services. Sources spoke anonymously due to the confidential nature of discussions.

Both assets are valued at less than $5 billion each; Crown Castle may opt to sell only one. If both are sold, the deal could range between $8 billion and $10 billion.

Discussions are still ongoing and far from guaranteed, with the possibility of other suitors or another round of negotiations. Success in these talks would occur amidst increased activity in the fiber industry due to growing demand for fiber broadband infrastructure.

Crown Castle, based in Houston, operates over 40,000 cellular towers in the U.S., holding a market value around $52 billion. After expanding its fiber business through acquisitions since 2015, the company is now reconsidering its strategy due to rising costs impacting financial performance.

Crown Castle aims to refocus on its tower business amid major U.S. carriers upgrading to 5G and boosting their network capacities. Following talks with activist investor Elliott Investment Management regarding board changes, Crown Castle is evaluating its fiber assets. Co-founder Ted Miller indicated that the fiber assets could fetch up to $15 billion if leadership includes him and his associates.

In June, the company revised its annual profit forecast and announced a 10% workforce reduction due to its fiber operations review.

About Zayo:
Boulder-based Zayo was acquired privately in 2019 by EQT and DigitalBridge (formerly Digital Colony). It operates a significant 145,000-mile fiber network throughout North America and Canada, connecting carriers, cloud services, data centers, and corporations.