BCE Acquires Ziply Fiber For $5.0 Billion, Pauses Dividend Growth
BCE Inc (TSX: BCE) is expanding its fibre footprint into the US, with the acquisition of Ziply Fiber for C$5.0 billion. The acquisition will enable the Canadian telecom oligopoly to take a commanding position in the Pacific Northwest of the United States, where Ziply is the leading fibre internet provider.
The acquisition, to occur under BCE’s Bell Canada subsidiary, is expected to add 1.3 million fibre locations to Bell’s portfolio, reinforcing the telecom giants position as the third-largest fibre internet provider in North America. Post-acquisition, Bell will boast 9 million fibre locations in North America, with the company saying it aims to reach over 12 million fibre locations by the end of 2028.
Ziply currently has over 1.3 million fibre locations across four US states, with plans for that figure to reach 3.0 million in the next four years.
The transaction sees Ziply acquired at 14.3x 2025 estimated adjusted EBITDA, a figure which includes run-rate synergies. The purchase price of $5.0 billion is expected to be funded in large part by the $4.2 billion sale of its divesture in MLSE. Bell has also entered into a US$3.7 billion delayed-draw term loan facility to the fund the transaction, in the even after the close of the MLSE sale occurs after the close of the acquisition.
BCE also indicated it intends to maintain its annual common share dividend at the level of $3.99 per share during the year ended December 31, 2025, which notably lacks any growth over 2024. The company stated it has paused dividend growth until the dividend payout and net debt leverage ratios are tracking towards target policy ranges.
BCE last traded at $44.81 on the TSX.
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