Zayo Going Private in $14.3B Deal; Analyst Expects Regulatory OK
Zayo is going private in a $14.3 billion deal that an analyst expects to get regulatory OK. It agreed to be bought by Digital Colony Partners and EQT Infrastructure IV fund affiliates, and "the Zayo team would continue to execute…
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the Company’s strategy and remain headquartered in Boulder, Colorado." It appears CEO Dan Caruso and other management will remain, Wells Fargo's Jennifer Fritzsche wrote investors after Tuesday's announcement. Digital Colony Managing Partner Marc Ganzi said the takeover target's "highly-dense fiber network in some of the world’s most important metro markets" can "meet the growing demand for data associated with the connectivity and backhaul requirements of a range of customers." The transaction is expected to close in the first half of 2020. MoffettNathanson's Nick Del Deo doesn’t "anticipate any challenges to garnering shareholder or regulatory approval for this deal, nor ... a topping bid," he wrote. "Zayo’s business trajectory and valuation never hit the levels management or more bullish investors hoped for after its" initial public offering. The company continues having "E-Rate traction," said a presentation (see page 8) on the quarter ended March 31. Revenue of $647.2 million was little changed from the year-ago quarter, Zayo reported. Profit rose 48 percent to $34.7 million. The company canceled its quarterly conference call that had been set for this week. It didn't comment further.