Duke Energy and investment fund manager Alinda Capital Partners are shopping their DukeNet Communications joint venture for sale, according to The Deal Magazine.
Based on unnamed sources, The Deal reports Duke and Alinda have retained RBC Capital Markets to sell the unit. The first bids are due in early June. Chris Nolter of The Deal reports:
As for valuation, one source said the unit could fetch $500 million or more, while another suggested that $450 million, or about 9 times (earnings before interest, taxes depreciation and amortization), would be more likely.
Duke spokesman Dave Scanzoni says Duke does not comment on rumors or speculation. Alinda, based in Greenwich, Conn., has not yet responded to a request for comment.
Top of the list
The Deal and other observers list several potential buyers. But The Zayo Group, a fiber-optic company based in Boulder, Colo., appears to lead everyone’s list. Zayo has made 24 acquisitions since its founding in 2007 and makes plain that its business plan is built on consolidating the highly fragmented fiber-optic network industry.
Analyst Donna Jaegers of D.A. Davidson & Co. asked Zayo CEO Dan Caruso about his interest DukeNet during a conference call May 15. He said the company is focusing on organic growth for now. But Caruso added that Zayo will “pay attention to whatever properties are out there” and will “remain active and interested as more parties become available in the market.”
DukeNet, which has 7,100 miles of fiber-optic cable in the Carolinas, Georgia, Tennessee, Florida, Virginia and Alabama, would be a good fit for Zayo. While Zayo has what are called “dark fiber” networks in Atlanta and Charlotte — an industry term for unused capacity — it has no active networks in the Southeast.
