Kilpatrick Stockton’s Gregory K. Cinnamon represented AGL Resources in its decision to sell a telecommunications unit to Louisville, Colo.-based Zayo Group for $71.5 million.
The unit being sold, AGL Networks, is what’s known as a dark-fiber telecommunications business. That means that AGL has laid fiber optic cabling to connect office buildings and other users, but does not provide telecommunications services itself, instead leasing its 795 route miles and 182,000 fiber miles connecting customers in primarily in Atlanta, Phoenix and Charlotte to other providers. This is similar, Cinnamon said, to AGL’s business model in the deregulated gas industry, where the company provides the pipes that transmit gas, but other marketers supply the gas itself.
Cinnamon said that when AGL decided to divest itself of some non-core assets, its financial adviser, SunTrust Robinson Humphrey, ran an auction to sell AGL Networks, attracting several other national and regional companies to the bidding pool.
“It was good to get out and just see an active bidding process for the asset,” Cinnamon said. “There were several people who were interested, and it just goes to show that good assets will always find a home.”
Zayo, which provides telecommunications, Internet and bandwidth infrastructure services in 23 states, is paying cash for AGL Networks. The acquiring company was represented by attorneys from Holme Roberts & Owen in Denver.
Cinnamon said he worked with AGL’s in-house counsel, William A. Palmer III, as well as people on the company’s business side, to negotiate and document the agreement, and to separate AGL Networks from any entanglements with its parent company. The agreement was signed March 23 and is expected to close by the end of the second quarter, pending approval under the Hart Scott Rodino Act and from regulators and third parties.