No, not their stock of course, they're privately held. Rather, in the wake of its purchase of AGL Networks and in preparation for the AFS deal, Zayo has divided itself internally, adding yet another business unit. Zayo Fiber Solutions (ZFS) will focus purely on the dark fiber side of the business. ZFS's president Matt Erickson puts it succinctly:
“Nearly all wireless, telecom, content, and Internet service providers utilize fiber to run certain aspects of their underlying networks. ZFS helps its customers extend the depth and breadth of their fiber network infrastructure.”
In other words, ZFS will continue to build, manage, and sell dark fiber to other providers. That presumably means both to Zayo Bandwidth - which will focus on lit services I presume - and to its neighbors and competitors.
Such hyper horizontal disintegration is not new to Zayo, it has been a recurring feature of how Chairman and CEO Dan Caruso has organized all the various pieces of the puzzle he has acquired through 15 acquisitions. Each business unit operates independently and must justify its own existence largely independent of the protective shield of its brethren. So if someone else figures out how to run a business off of ZFS's dark fiber and conduit better than Zayo Bandwidth does, then, well, good for them. But then each unit has a laser focus on their own business model, with greater freedom action and the flexibility to respond rapidly to the market. It's enough, perhaps, to make an RBOC scream and run away - which of course wouldn't necessarily be a bad thing.
While the AGL Networks business plus a good fraction of AFS will make up the bulk of ZFS, there are surely dark fiber assets from prior acquisitions that will be worked in as well. There's certainly some in Pennsylvania, Indianapolis, Memphis, and Spokane (of Columbia Fiber Solutions). ZFS will also be Zayo's vehicle of entry into new markets via new construction, but for the moment it does appear that Zayo feels that asset pricing favors M&A in such cases.
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