Digital Colony said the deal was the largest syndicated private equity investment, the fifth largest media and communications leveraged buy-out (LBO) and the second largest LBO overall since 2008.
“Zayo has amassed a world class network that is unparalleled in the markets they serve, supporting the world’s most innovative companies,” said Marc Ganzi (pictured), CEO of Digital Colony and CEO-elect of Colony Capital.
Jan Vesely, partner at Stockholm-based EQT, said: “Zayo is ideally positioned to meaningfully expand its offerings and services against the backdrop of accelerating demand for innovative fibre infrastructure solutions.”
Ganzi, whom Capacity will be interviewing shortly, added: “We believe that fibre networks are the crucial connective element in the digital infrastructure ecosystem, and we look forward to partnering with the Zayo team to execute on the plan of leveraging these powerful assets and driving growth with our customers across multiple markets and verticals.”
When Capacity interviewed him last year, he could not talk about Zayo.
Zayo’s CEO Dan Caruso, who set the company up 13 years ago after a career with the likes of MFS and Level 3, said: “We are excited to launch this new chapter of Zayo, as a private company under the ownership of a consortium led by two highly experienced infrastructure investors who have a deep understanding of our business and bring significant value to Zayo."
Since 2007, Colorado-based Zayo has grown through both organic investment and 45 acquisitions. It has metro and long-haul networks in the US, Canada and western Europe.
Before going public in 2014, with a listing on the New York Stock Exchange, Zayo’s original private equity investors funded the company with just over $1 billion of equity. The company pointed out yesterday that, with the close of the transaction, that equity is worth over $8 billion.
Caruso said: “This is a great outcome for the company, its former shareholders, our customers and employees, and our new ownership group. As a private company, we will have greater flexibility to pursue our long-term strategy and leverage our fibre to fuel global innovation for our customers.”
Over the past few years the direction of the company had become uncertain: at one stage it proposed to split itself into an infrastructure company and a services company. So far, Digital Colony and EQT have not revealed any detail about their plans for such a huge acquisition.
Among the organisations that will miss Zayo as a private company are those strange share-tippers who even yesterday were still recommending it as an investment, hours before the deal was closed. "Why Zayo Group Holdings should be on your radar moving forward,” said one on Friday.
