BCE (BCE) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of Ziply Fiber accelerates fiber growth strategy, expands scale and geographic diversification, and provides entry into the under-penetrated U.S. fiber market.

• The deal positions the combined entity as the third-largest fiber network and internet service provider in North America, targeting over 12 million fiber locations by 2028.

• Ziply Fiber’s strong local market presence and advanced fiber buildout complement the acquirer’s scale and expertise.

• U.S. market offers attractive fiber economics, low build costs, and strong ARPU growth, especially in Ziply's footprint with limited competition.

• Acquisition supports long-term value creation for shareholders and provides a platform for further U.S. expansion.

Financial terms and conditions

• 100% of Ziply Fiber's equity acquired for US$3.65 billion (C$5.0 billion) in cash, with a total enterprise value of C$7.0 billion including C$2.0 billion in net debt.

• Transaction multiple is approximately 14.3x estimated 2025 Adjusted EBITDA, including run-rate synergies.

• Funded primarily by MLSE sale proceeds (~C$4.2B) and a discounted treasury DRIP, with a fully committed US$3.7B term loan as backup.

• No incremental debt required; pro forma net debt leverage ratio remains near 3.7x Adjusted EBITDA.

• Dividend growth paused for 2025, maintaining current annual dividend at C$3.99 per share; DRIP to improve payout ratio by over 30% in 2025 with ~30% participation.

Synergies and expected cost savings

• Annual run-rate cash cost synergies of US$30 million expected from procurement, customer care, IT, and corporate efficiencies.

• Cross-sell opportunities for enterprise products and services anticipated.

• Synergies are included in the transaction valuation, supporting long-term value creation.