16 May Digital Colony and EQT Buy Zayo
Digital Colony is an investment firm that focuses on mobile and internet infrastructure that, along with EQT, is taking private ownership of Zayo Group Holdings Inc (Zayo). Zayo is an infrastructure provider known for its dark fiber in the United States, Canada, and Europe. They are also known for their highly dense metro connectivity. The company has over 130,000 miles of fiber network and over 35,000 fiber-lit buildings. The deal was announced on May 8th, 2019, but the sale of Zayo has been anticipated for several months.
The deal is expected to close in the first half of 2020 and its shareholders are to receive $35 per share, assuming they get clearance and approval by Zayo’s shareholders. Giving $35 per share to shareholders was a higher amount than anticipated because the current stock price has been recently fluctuating around $30. It is also assumed that the deal will include Zayo’s supposed debt of over $5 billion. However, Zayo will continue to operate in their original headquarters in Boulder, CO and continue their company’s strategy with the additional help.
Zayo’s CEO stated that the merger with will help Zayo because “Digital Colony and EQT share our vision that Zayo’s Fiber Fuels Global Innovation” and it helps empower Zayo “to accelerate its growth and strengthen its industry leadership.” Marc Ganzi from Digital Colony states “Zayo has a unique opportunity to meet the growing demand for data associated with the connectivity and backhaul requirements of a range of customers. We are excited to work alongside the management team and EQT to grow the business [Zayo] and expand its presence in the global market.” Zayo’s own board of directors have expressed, “the sale of Zayo to Digital Colony and EQT Infrastructure is in the best interest of Zayo and all its stakeholders. The transaction delivers immediate and substantial value to shareholders and will strengthen Zayo’s financial flexibility, enabling the company to increase investments and better position itself for the long-term growth and profitability.”
For EQT, this was a significant move. EQT is an investment firm that funds portfolio companies in Europe, Asia, and the US to achieve sustainable growth. EQT already created Segra from Lumos Networks and Spirit. Meanwhile, Digital Colony has previously combined Digital Bridge and Colony Capital. Now, with EQT and Digital Colony leading the way, Zayo will be looking towards a bright and operational growth.
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Author: Valerie Stephen