Zayo acquires Latisys, enhances colocation network capabilities, reach

Zayo is continuing its ongoing buying spree to enhance its data center portfolio by reaching a deal to acquire colocation and infrastructure as a service (IaaS) provider Latisys for $675 million.

Similar to other acquisitions Zayo has made in the colocation space, the Latisys purchase is about scale. By making this deal, Zayo will expand its data center portfolio to 45 facilities in the United States, France and the United Kingdom.

Latisys currently provides its suite of colocation and IaaS services through eight data centers across five markets--Northern Virginia, Chicago, Denver, Orange County and London. Each of its data centers have a total of over 185,000 square feet of billable space and 33 megawatts of power with the option to expand as its mid- to large-sized enterprise customer demands dictate new growth.

As a combined company Zayo will be able to couple its fiber assets and zColo data centers with Latisys' facilities. Through this deal, zColo will gain data center presence in four new markets.

One of the other benefits is that Zayo already owns and operates metro fiber networks across all of Latisys' markets, meaning that it can immediately connect each of its data center facilities. This will enable Zayo to sell fiber and bandwidth services to Latisys' core set of enterprise customers, while marketing new colocation and IaaS services to Zayo's base of carrier and content customers.

Latisys has been a profitable company, generating adjusted EBITDA of approximately $11.0 million for the three months ended September 2014 and approximately $4.2 million for the month of November 2014.

Zayo said it expects to fund the deal with senior unsecured indebtedness as permitted by existing debt covenants, subject to market conditions, and is expected to close within the current quarter, subject to customary approvals.

Acquiring regional fiber assets and data center providers has been a key element of Zayo's acquisition and growth strategy. Over the past year, the service provider has been scaling its data center reach by acquiring both Dallas-based colocation providers CoreXchange in March and Atlanta data center and managed services provider AtlantaNAP.

For more:
- see the release

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