BCE Enters U.S. Fiber Market With $3.65b Ziply Fiber Acquisition, Shares Drop
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Marking its first major foray into the U.S. fiber market, BCE Inc. (NYSE:BCE) announced Monday that it would buy Ziply Fiber for around CA$5.0 billion (US$3.65 billion). The purchase will add over 1.3 million American sites to BCE's fiber network, strengthening its position outside of Canada.
BCE intends to pay the purchase with CA$4.2 billion in net proceeds from its most recent sale of a stake in Maple Leaf Sports & Entertainment (MLSE). With expected synergies considered, BCE's statement shows Ziply Fiber at roughly 14.3 times its predicted 2025 adjusted EBITDA.
After the planned closure in the latter part of 2025, Ziply Fiber will remain a separate business unit headquartered in Kirkland, Washington. BCE also confirmed its will to keep its yearly common share dividend at $3.99 per share going until the fiscal year ending December 31, 2025. Early trading Monday saw BCE's shares plummet 9.41% as the market responded to the significant acquisition.
This article first appeared on GuruFocus.