The entrepreneurial attitude that Dan Caruso brings to Zayo Group as its co-founder, President and CEO is evident in many areas of the company, but most prominently in the targeted acquisitions the company has made since its founding in 2006.
Before taking Zayo Group onto an acquisition path that included 360networks last October and most recently, AboveNet (NYSE: ABVT) and Arialink (within a day of each other), Dan Caruso honed his skills at Level 3 Communications (NYSE: LVLT) as a founding executive, leading its engineering, construction and operations during the first fiber boom between 1997-2000, and then taking charge of most of the transport provider's business and marketing functions from 2001-2003. He headed ICG Communications between 2004 and 2006, taking the debt-ridden provider to a successful buyout by Level 3.
The AboveNet deal is another important strategic move for Zayo: It gives it a deeper metro fiber footprint in New York, New Jersey and Illinois (Chicago), as well as access to European markets. Zayo added 930 route miles in Michigan with the Arialink buy, adding to the network it purchased in 2008 from the former CenturyTel, now CenturyLink (NYSE: CTL).
But perhaps the biggest purchase Zayo made since its founding is its October 2011 acquisition of 360networks, which boosted the company into big-league territory by adding 18,500 route miles of intercity and metro fiber stretching across 22 states and into British Columbia.
"The combination with 360networks marks a new chapter for Zayo, one in which we emerge as a national provider of bandwidth infrastructure service," Caruso said of the acquisition. "The near doubling of the network allows us to provide a greater range of solutions, both in terms of markets served and ability to interconnect services across the markets."
Senior Analyst Ed Gubbins of Current Analysis (then with NPRG) saw it as a great buy for Zayo for several reasons. "It's a great fit with Zayo's strategy in that 360's network serves a good mix of top-tier markets as well as the second- and third-tier markets upon which Zayo has built much of its business," he said. "These are great markets to be in now, particularly with the fiber backhaul land grab going on, as they're less competitive than the Tier 1 cities."
Zayo's moves so far look to be pretty smart, as it positions itself to provide greater wholesale options in areas of the country that haven't had that choice before.