Yesterday, Zayo and its private equity backers finally took a big step toward the IPO that many have anticipated for some time. The S-1 for Zayo Group Holdings has now been filed with the SEC.
Zayo is making its move at what seems to me like a potentially advantageous time for the company. In the past month or two, M&A in the sector has threatened to reduce the field of publicly held competitive fiber operators in the USA rather sharply. With Level 3 buying tw telecom, Consolidated buying Enventis, and Birch buying Cbeyond, the number of places one could invest in non-ILEC/wireless and non-cable-MSO network infrastructure has been dwindling to say the least.
An IPO by Zayo therefore could find demand for its shares to be as optimal as it has been for a long while. And while the public markets haven't properly appreciated the network infrastructure business for a long time, Zayo and its CEO Dan Caruso have been at the forefront of educating them in what they are missing since the company was founded. They've done that both by example and by the openness with which they have supplied their financial and operational data over the years.
In fact, whereas for many other potential IPOs the S-1 is the first public look under the hood, there's nothing really new in this S-1 filing worth noting. We've pretty much seen it all before, and in much greater detail actually. There's a nominal amount they expect to raise of $100M, but that's just a placeholder number at this point I'd think.
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