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 Huawei Video Resource Center
Huawei Highlights at BBWF 2014

11|20|14   |   3:40   |   (0) comments


Broadband World Forum is one of the world's largest telecoms, media and technology events with over 7,800 senior executives from across the globe converging on Amsterdam every year to identify the Next Big Thing. BBWF is an exciting place to meet the entire industry under one roof and identify the latest in network innovation, service optimization and customer ...
LRTV Huawei Video Resource Center
How Will BCMS Stimulate Margin for Broadband Operators?

11|19|14   |   6:52   |   (0) comments


In BBWF 2014, Liu Shuqing emphasizes the value of FMC 2.0 based full service experience by throwing light on the BCMS solution. The underlying principle of this innovative technique is to create network robustness and driving network from connection oriented to ACE – BAND oriented infrastructure, in which applications, cloud, and user experiences will be an asset ...
LRTV Huawei Video Resource Center
SingleFAN3.0: Better Connected Experience

11|19|14   |   3:06   |   (0) comments


At the BBWF 2014, David Hu, the VP of Huawei Access Network Product Line, talked about the future of access networks – SingleFAN3.0: faster broadband, wider coverage, and smarter connection.
LRTV Interviews
Basil Alwan Interview: The Road to Cloud

11|19|14   |   09:09   |   (0) comments


Alcatel-Lucent's head of IP and Transport talks about the migration towards a web-like networking environment, the impact of the cloud, SDN and NFV, and the yet-to-be-announced FP4 chip.
LRTV Documentaries
FairPoint Makes a Fair Point About Analytics

11|19|14   |   1:56   |   (1) comment


The US-based communication service provider gets to grips with advanced analytics, tackling data and breaking down the silos within its own business.
LRTV Documentaries
Analytics Lets C Spire Get to Know Subs

11|19|14   |   3:01   |   (2) comments


It's all about the data for US operator C Spire as it uses analytics to personalize its customer service down to individual subscribers.
LRTV Interviews
Nuage Branches Out With SDN: CEO Interview

11|17|14   |   9:32   |   (0) comments


Sunil Khandekar, CEO of Alcatel-Lucent's SDN-focused unit Nuage Networks, talks about the opportunities and challenges of breaking out of the data center into wide-area networks.
Light Reedy
Telecom Analytics Grows Up

11|14|14   |   1:15   |   (4) comments


The big data analytics debate has moved on from a year ago, with some experts suggesting it's no longer a technology challenge.
LRTV Huawei Video Resource Center
Huawei Compass

11|14|14   |   3:17   |   (1) comment


At OpenStack Summit 2014, Shuo Yang, Huawei Principal Cloud Infrastructure Architect introduced Huawei Compass, the software tool for solving customers' problems on the journey of OpenStack Cloud.
LRTV Huawei Video Resource Center
Huawei's Cloud Strategy in European Region

11|14|14   |   2:56   |   (1) comment


At OpenStack Summit 2014, Dr. Gotz, CTO of Huawei IT in European Region introduced Huawei's cloud strategy in European region.
LRTV Huawei Video Resource Center
Huawei's Contribution on OpenStack

11|14|14   |   5:58   |   (0) comments


At OpenStack Summit 2014, Dennis Gu, Huawei Chief Architect of Cloud Computing introduced the relationship between OpenStack and cloud computing, and Huawei's contribution on OpenStack.
LRTV Huawei Video Resource Center
Caroline Chappell on Open Cloud Trends

11|14|14   |   2:00   |   (0) comments


At OpenStack Summit 2014, Caroline Chappell from Heavy Reading shared her perspective of open cloud trends. She believes it's really important to all work as a community and establish stable core to OpenStack.
Upcoming Live Events
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
April 14, 2015, New York City, NY
May 6, 2015, McCormick Convention Center, Chicago, IL
May 30, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Bell Labs Chief Slams 'Toy' Networks
Robert Clark, 11/19/2014
'Job Security' Biggest SDN Security Challenge
Mitch Wagner, West Coast Bureau Chief, Light Reading, 11/14/2014
$38.3M: Ain't That a Kik in the SMS
Sarah Reedy, Senior Editor, 11/20/2014
Subsea Market Lures New Cast of Characters
Dan O'Shea, Managing Editor, 11/14/2014
Like Us on Facebook
Twitter Feed