M&A Journal: Is Zayo Making a Move on AFS?

June 29th, 2010 by · 4 Comments

Sources tell me that Zayo Group is preparing what would probably be its largest acquisition to date:  American Fiber Systems.  Both Zayo's Dan Caruso and AFS's Dave Rusin have been amongst the most vocal proponents of metro fiber in the sector, both having their own blogs and both even frequenting this site's comment section as well.  They've been unusually quiet lately, which has had me wondering what each was up to.  The idea of the two joining forces seems, well, formidable. 

I don't know what the financial terms might be and it could of course turn out to be a false lead, but both companies are backed by private equity which as a whole has been very active lately when it comes to metro fiber.  I hadn't heard that AFS was explicitly for sale, but it doesn't surprise me that much as its backers have tended to view (and fund) the assets fairly conservatively and it has been a sellers market for metro fiber.  If it happens, I will be interested to see if they stay on board in a stock transaction or just cash out.

Strategically, the assets fit together very nicely and would bring Zayo several big steps closer to a fully national presence.   AFS's Atlanta assets will dovetail with the AGL fiber they are also acquiring.  Will it happen?  Or am I barking up the wrong tree?  I suspect we will hear soon...

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Categories: Mergers and Acquisitions · Metro fiber

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