Mr. Mirko Bibic reports

BCE TO ACQUIRE ZIPLY FIBER, ACCELERATING ITS FIBRE GROWTH STRATEGY ACROSS NORTH AMERICA

BCE Inc.'s wholly owned subsidiary, Bell Canada, has entered into a definitive agreement to acquire Ziply Fiber, the leading fibre Internet provider in the Pacific Northwest of the United States, for approximately $5-billion in cash and the assumption of outstanding net debt of approximately $2-billion to be rolled over at transaction close, representing a transaction value of approximately $7-billion.

This transaction enhances Bell's growth profile and strategic position by giving it a foothold in the large, underpenetrated U.S. fibre market, while increasing its scale, diversifying its operating footprint and unlocking significant growth opportunities.

"This acquisition marks a bold milestone in Bell's history as we lean into our fibre expertise and expand our reach beyond our Canadian borders. Fibre is at the heart of what we do, and we're proud to connect people and businesses and enable them to do more through our fibre networks. By bringing together Bell and Ziply Fiber's exceptional talent, we'll accelerate our growth while continuing to deliver significant value for our customers and shareholders," said Mirko Bibic, president and chief executive officer, BCE and Bell Canada.

Ziply Fiber's focus on network technology and innovation has resulted in steady expansion of its footprint since 2020, with over 1.3 million fibre locations across four U.S. states and plans to reach more than three million locations in the next four years. Upon closing of this acquisition, Bell will be poised to expand its fibre footprint to over 12 million locations across North America by the end of 2028, reinforcing its position as the third-largest fibre Internet provider in North America.

The combination of Bell and Ziply Fiber will offer enhanced value for existing and new customers in both Canada and the United States as demand for faster, more reliable Internet and data services increases. Together, the two companies will bring a depth of management, product leadership and technological expertise, aligned on culture, vision and long-term strategy.

"Bell's leadership and vision aligns perfectly with our commitment to improve the connected experiences of our communities through fast, reliable fibre Internet and a refreshingly great experience. This acquisition enhances our growth strategy with the scale and experience of one of North America's leading fibre operators. I'm also grateful for the support of our original partners at both Searchlight Capital and WaveDivision Capital," said Harold Zeitz, chief executive officer, Ziply Fiber.

This transaction values Ziply Fiber on an enterprise-value basis, net of the present value of acquired tax attributes, at approximately 14.3 times 2025 estimated adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), including run-rate synergies. The acquisition is expected to close in the second half of 2025, subject to certain customary closing conditions and the receipt of certain regulatory approvals. Once the transaction has closed, Ziply Fiber will operate as a separate business unit and will continue to be headquartered in Kirkland, Wash.

Acquisition financing

The purchase price of the acquisition is anticipated to be approximately $5-billion, $4.2-billion of which is expected to be financed from the net proceeds of the divestiture of Maple Leaf Sports & Entertainment. BCE expects to finance the balance of the purchase price from a discounted treasury DRP (dividend reinvestment plan) program (details herein). In the event that the close of the sale of BCE's ownership stake in MLSE occurs after the close of this acquisition, Bell has entered into a $3.7-billion (U.S.) fully committed delayed-draw term loan facility to finance the acquisition.

Upon closing of the acquisition and the pending divestitures of Northwestel and BCE's ownership stake in MLSE, BCE's net debt leverage ratio is expected to remain relatively unchanged compared with its current net debt leverage ratio. Bell remains focused on maintaining its long-term debt investment-grade credit ratings and to deleveraging over time.

BCE's common share dividend

BCE intends to maintain its annual common share dividend at the current level of $3.99 per share during the financial year ending Dec. 31, 2025. In the context of the strategic acquisition of Ziply Fiber, BCE's focus is on long-term value creation for shareholders, and BCE intends to pause dividend growth until BCE's dividend payout and net debt leverage ratios are tracking toward its target policy ranges, subject to review annually by the BCE board of directors.

Discounted treasury dividend reinvestment plan

BCE intends to amend its shareholder dividend reinvestment and stock purchase plan to provide, at the BCE board's discretion, for the issuance of new common shares from treasury at a discount to the average market price of the common shares preceding the applicable dividend payment date. The equity issuance anticipated from implementing a discounted DRP is expected to enable BCE to retain cash to help finance strategic growth initiatives and strengthen the balance sheet.

By participating in the DRP, eligible shareholders can automatically reinvest all or any portion of the cash dividends paid on their common shares in additional BCE common shares, without charge for any commissions or brokerage fees. Common shares delivered to participants under the DRP in reinvestment of cash dividends are currently purchased by the plan administrator on the secondary market with cash provided by BCE.

BCE anticipates that commencing with the dividend payable on Jan. 15, 2025, to eligible shareholders as of the Dec. 16, 2024, record date, and subsequently until further notice, common shares will be issued from treasury at a discount of 2 per cent to the average market price. The amendment is subject to the finalization of terms and approval of the Toronto Stock Exchange.

A separate press release including additional information will be issued following receipt of approval from the TSX. This communication does not constitute an offer to sell or the solicitation to buy securities.

Call with financial analysts

BCE will hold a conference call with the financial community to discuss this announcement on Monday, Nov. 4, 2024, at 8:30 a.m. ET. Media are welcome to participate on a listen-only basis. To participate, please dial toll-free 1-844-933-2401 or toll 647-724-5455. A replay will be available until 12 a.m. ET on Dec. 4, 2024, by dialling toll-free 1-877-454-9859 or toll 647-483-1416 and entering passcode 4188368. A live audio webcast of the conference call will be available on BCE's website.

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