Zayo Group private again after being sold for $14.3 billion
Boulder communications infrastructure firm Zayo Group Holdings is a private company again.
Zayo’s new owners, global investment firms Digital Colony Partners and the EQT Infrastructure IV fund, officially closed on their $14.3 billion purchase of the company that specializes in providing “missioncritical bandwidth to the world’s most impactful companies” on Monday.
The shocks that rocked the market didn’t have any impact on Zayo shareholders. They were paid the $35 per share price announced in May, at the time a 32% premium over the stock’s weighted six-month average, according to Zayo.
Unlike other high-profile Colorado companies that were purchased and then disappeared (see: Qwest) or moved their headquarters to other states when new leadership took over (see: Chipotle Mexican Grill), Zayo is staying put and aims to grow in place, Zayo CEO and cofounder Dan Caruso said Monday.
“It’s kind of, I think, a feelgood story,” Caruso said. “I think the best news for the Front Range and for Colorado is that Zayo gets to continue forward as a company headquartered here in Colorado and continue to create jobs. It will continue to grow and continue impacting the community in a lot of positive ways.”
The company employs 1,150 people in Colorado, mostly in Boulder and Denver, officials say.
Caruso, a co-founder of now gone Level 3 Communica
tions, launched Zayo as a startup on Boulder’s Pearl Street in 2007. The company eventually went public in late 2014, its initial public offering bringing in about $400 million. But a major shareholder last year complained about management turnover issues and strategy changes in a letter suggesting a sale was in the best interest of shareholders.
Zayo was at a point in its life as a public company where its long-term interest was no longer the same as those of many shareholders with shorter-term outlooks, Caruso said Monday. The $35 per-share price satisfied shareholders and was a good entry point for the new owners.
“We certainly will be able to focus more on the day-to-day execution of the business” now, he said, adding that he expects Digital Quality and EQT to invest in acquiring more infrastructure to fuel growth.
Zayo has 133,000 miles of fiberoptic cable running to thousands of buildings in North America and Europe, company officials said Monday. It also operates 44 data centers.
The company’s clients include tech giants such as Facebook and Google, media companies such as ESPN and mobile carriers including AT&T and Verizon. On Monday, Caruso proudly pointed out local clients hooked into Zayo’s network including Denver Public Schools and the UCHealth system.
Zayo reported a net income of $79.3 million for the second half of 2019, up from $52.3 million in the second half of 2018. Digital Colony and EQT have also taken on $5.9 billion of Zayo’s net debt via the purchase.