Today Zayo said it has finished interconnecting the AboveNet network with its own and achieved a variety of other milestones in the integration, which it has been working on for a little less than a quarter now. It's a bigger job than any they have attempted before, but in a quarter or two they'll surely be ready for more.
Zayo's not small potatoes anymore, what they do will have repercussions across the sector. So where makes the most sense for them to strike next strategically? Well, aside from the single market metro asset type they could go after at any time (Arialink, Fibergate this year), there are IMHO two main schools of thought:
- Florida - While they added a node in Miami with the AboveNet deal, they have no metro and a very minor presence in one of the most populous states. It's also a gateway to South America, a market that it's becoming impossible to ignore. Two obvious M&A targets here for Zayo would be Fiberlight and FPL Fibernet, each of which would take them from zero to sixty in Florida immediately but would also help beef up Texas as well. Of the two, Fiberlight is likely available as the Thermo group seems ready to move on - and some have suggested to me that such a deal would probably have happened already if AboveNet hadn't upset the apple cart.
- Western Europe - Along with AboveNet's London network was their expansion ring into France, the Netherlands, and Germany. At current pricing across the pond, you have to think that Zayo wouldn't hesitate to go after something in the same zone, something that would come with the local expertise in running fiber on the continent. The company that fits that bill most clearly is euNetworks, whose management (Brady Rafuse, John Scarano) is very, very well known to Zayo's CEO Dan Caruso. Whether they're in a selling mood or not is another question of course.
Other possibilities are out there of course: New England or even Canada. But those seem to be the clearest targets to me.