Light Reading
Operator's IPO filing reveals how much it paid for its numerous acquisitions.

How Zayo Spent $3.7B on Acquisitions

Ray Le Maistre
7/4/2014
50%
50%

IPO filings are interesting documents to rummage through, as we found out this week when wholesale services specialist Zayo announced it had filed papers with the SEC for a public listing of its stock. (See Zayo Files for IPO.)

Zayo Group Inc. (NYSE: ZAYO) has become famous in the industry for its appetite for acquisitions, having completed 30 in the period between July 2007 and May 2014, with prices ranging from just $15,000 (Northwest Telephone California, May 2009) to $2.21 billion (AboveNet, July 2012).

Check out this table for the full list and then get the background on some of the more significant deals through our story links below.

Table 1: Zayo's Acquisitions July 2007-May 2014

Date Name of company acquired Price paid in $ thousands*
July 2007 Memphis Networx $9,173
August 2007 PPL Telecom $46,301
September 2007 Indiana Fiber Works $22,601
November 2007 Onvoy $69,962
November 2007 Voicepipe $2,800
February 2008 Citynet Fiber Networks $99,238
May 2008 Northwest Telephone $5,181
July 2008 CenturyTel Tri-State Markets $2,700
September 2008 Columbia Fiber Solutions $12,091
September 2008 CityNet Holdings Assets $3,350
September 2008 Adesta Assets $6,430
May 2009 Northwest Telephone California $15
September 2009 FiberNet $96,571
July 2010 AGL Networks $73,666
September 2010 Dolphini Assets $235
October 2010 American Fiber Systems $114,141
December 2011 360networks $317,891
December 2011 MarquisNet $13,581
May 2012 Arialink $17,129
Jul 2012 AboveNet $2,210,043
Aug 2012 FiberGate $118,335
October 2012 USCarrier $16,092
December 2012 FTS $109,700
December 2012 Litecast $22,160
May 2013 Core NAP $7,080
August 2013 Corelink $1,889
October 2013 Access $40,068
October 2013 FiberLink $43,137
March 2014 CoreXchange $17,503
May 2014 Geo $294,228
TOTAL $3,667,645
Source: Zayo S-1 filing with the SEC.
* All prices are net of cash acquired and includes assumption of debt and capital leases.

Since May, Zayo has struck further deals, closing the €58 million ($78.9 million) acquisition of French operator Neo Telecoms on July 1, and announcing the purchase of the AtlantaNAP data center on July 3 for $52.5 million. (See Zayo Group Acquires AtlantaNAP Data Center.)

For more on some of these deals, see:

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

(4)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
DOShea
50%
50%
DOShea,
User Rank: Blogger
7/8/2014 | 7:21:10 AM
Re: Remarkable sequence...
The buying binge has been part of Zayo's identity for as long as I can remember. Similar to Level 3 in some ways for sure, though we have never heard much about problems integrating the acquistions. Going public, needless to say, will bring much more scrutiny to this company from top to bottom.
Joe Stanganelli
50%
50%
Joe Stanganelli,
User Rank: Light Sabre
7/5/2014 | 2:33:45 AM
The Bailout Business Plan
Ha!  Perhaps Zayo's strategy is to buy as many companies as it can and get as puffed up as it can...and leave it at that, profits-be-damned.

After all, as recent US history has taught us, if you're a big enough company, it doesn't matter if you fail.
bosco_pcs
50%
50%
bosco_pcs,
User Rank: Moderator
7/4/2014 | 1:13:45 PM
Re: Remarkable sequence...
Ray:

 

Size matters! This roll-up strategy may even be cheaper than the built-out (remember the early years of Level 3?) 

 

I don't follow the infrastructure folks anymore but some of the acquisitions like Abovenet were rather hot at one point or another. So if Zayo can manage its finances well before the era of cheap money runs its course, it may very well prosper. Look at Level 3, what a survivor!

 

disclosure: I own a few shares of LVLT
Ray@LR
50%
50%
Ray@LR,
User Rank: Blogger
7/4/2014 | 11:23:40 AM
Remarkable sequence...
That is an extraordinary list of acqusitions, and the company says there's more to come!

But how attractive will that, and the $3 billion debt pile, make its shares?

It'll be interesting to see how much it tries to raise - the $100 million figure is the usual placeholder with an initial S1.
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Custom TV
Razorsight Expert's Advice on Real-Time Analytics

11|27|14   |   1:43   |   (0) comments


Razorsight's powerful cloud-based Predictive Analytics solutions are used by the world's leading communications and media brands to drive smarter decisions, enable faster actions and optimize outcomes. Get expert advice.
LRTV Interviews
From 4G to 5G: Alcatel-Lucent's Dave Geary

11|25|14   |   09:09   |   (1) comment


Dave Geary, President of Wireless at Alcatel-Lucent, talks about the evolution of the 4G market, small cells, partnerships, 5G and the IoT.
LRTV Huawei Video Resource Center
Building a Secure Telefonica Network With Huawei's High-End Firewall

11|24|14   |   4:37   |   (0) comments


Andrew Davies, IP architect of the Telefonica, a leading digital communications company, discusses the Huawei security gateway solution and putting the solution into the testbed.
LRTV Huawei Video Resource Center
Huawei Partners with Spirent to Verify CE12816's 10GE Port & TRILL Networking Capabilities

11|24|14   |   2:50   |   (0) comments


Spirent Communications is the world's leading supplier for telecom testing appliances and solutions. Spirent has been in a close partnership with Huawei for a long time.
LRTV Huawei Video Resource Center
Saudi Airlines & Its ICT Transformation

11|24|14   |   2:07   |   (0) comments


In this video, Saudi Airlines discusses its network problems and how Huawei's Agile Network is its all-in-one solution.
LRTV Huawei Video Resource Center
Huawei's Agile Switch Benefiting Saudi Arabia's Yamamah Hospital

11|24|14   |   2:40   |   (0) comments


Saudi Arabia's Yamamah Hospital speaks about how Huawei's Agile Switch has improved the medical service's network infrastructure.
LRTV Huawei Video Resource Center
FanPlay & Huawei Build a Wireless Agile Smart Stadium

11|24|14   |   2:13   |   (0) comments


FanPlay is a cloud-based white label service, which is effectively a football fan engagement platform underpinned by mobile payment technology.
LRTV Huawei Video Resource Center
Building an Agile Stadium

11|24|14   |   3:54   |   (0) comments


Stadiums may be thousands of tons of concrete and steel, but they now need to be agile. Being at the stadium may not be as alluring as it once was. Sports franchises and stadium operators discuss how to get fans back.
LRTV Huawei Video Resource Center
Huawei Helps ChinaCache Tackle Challenges in the Internet Industry

11|24|14   |   3:09   |   (0) comments


ChinaCache is China's largest content distribution network supplier. Huawei's CE12800 has provided ChinaCache with very strong support in its establishment of an infrastructure network.
LRTV Huawei Video Resource Center
Cefinity on Managed Security Services & Next-Generation Firewall

11|24|14   |   7:05   |   (0) comments


Cefinity is a cloud management service provider in Southeast Asia. Ivan Zhang, CEO of the company, discusses the implementation of security service management in the cloud era.
LRTV Huawei Video Resource Center
Huawei's Agile Gateway in the Eyes of Cefinity

11|24|14   |   2:11   |   (0) comments


Cefinity is a managed service provider for enterprise networks. The company currently uses Huawei's AR series routers for the most complete range of functions. CEO Ivan Zhang speaks about the advantages of the AR series routers.
LRTV Huawei Video Resource Center
CTO of Bus-Online Talks About Huawei's Agile Gateway

11|24|14   |   2:53   |   (0) comments


Bus-Online covers around 100 million users everyday. In addition to providing mobile TV, and advertising services to the public, Bus-Online has also entered the field of mobile Internet.
Upcoming Live Events
December 2, 2014, New York City
December 3, 2014, New York City
December 8-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
April 14, 2015, New York City, NY
May 6, 2015, McCormick Convention Center, Chicago, IL
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
Irish Telecom outlines the rise of VoIP technology, including its adoption within businesses and their perception of its quality.
Hot Topics
Net Neutrality Even Mark Cuban Could Love
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/26/2014
Why 5G Is a Different Beast
Robert Clark, 11/26/2014
Do You Have a 2020 Vision?
Dennis Mendyk, Vice President of Research, Heavy Reading, 11/21/2014
Eurobites: Net Neutrality Battle Looms
Paul Rainford, Assistant Editor, Europe, 11/27/2014
New Juniper CEO Can Be Thankful for $14.5M
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/25/2014
Like Us on Facebook
Twitter Feed