Zayo Group, a company that provides a 131,000-mile fiber network in the U.S., Canada and Europe, has agreed to be acquired by affiliates of Digital Colony Partners and the EQT Infrastructure IV fund. As part of the deal, Zayo will convert from a public company to a private company. Under the new ownership, the Zayo team will continue to be headquartered in Boulder, Colorado.
Zayo shareholders would receive $35 per share in a cash transaction, but the deal also includes the assumption of $5.9 billion of Zayo’s net debt obligations, resulting in a price of about $8.8 billion.
Rumors have been circulating for several months that Zayo was looking for a buyer. Two months ago, activist investor Starboard Value criticized the company for poor performance. Starboard sent a letter to the company complaining of weak returns for shareholders and “confusing strategic changes.”
Digital Colony invests in telecommunications and data centers among other investments. Today, Marc Ganzi, managing partner of Digital Colony, said in a statement, “Zayo has a world-class digital infrastructure portfolio, including a highly-dense fiber network in some of the world’s most important metro markets. We believe the company has a unique opportunity to 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 calendar 2020.