Zayo has officially kicked off its long awaited IPO, three months after filing its S-1 with the SEC over the summer. The move will add another major pure fiber play to the markets. It comes at a time when, a decade after the telecom nuclear winter, the public markets have finally started giving fiber networks some respect.
It’s been an exciting, 7 year road for the company’s roll-up of internet infrastructure assets, with some 30 transactions along the way and surely more yet to come. Not so long ago, the company was an upstart owner of a few isolated, overlooked, and under-appreciated fiber assets. But in 2014 they have a fiber footprint spanning 81,000 route miles, 15K on-net buildings and towers, 37 interconnection-focused data centers, and an expanding new front in western Europe. As much as anyone in the sector, Dan Caruso and his team have shown by example how to unlock the value in fiber.
Some 28.9M shares are being offered in the IPO, of which 11.1 are from Zayo itself, while the rest will come from Zayo’s private equity owners. Once public, the stock will be listed on the NYSE under the rather unsurprising ticker ZAYO. The initial pricing per share is expected to be in the $21-24 range, which puts the total expected proceeds at around $600-700M. Zayo’s share will go to the usual ‘general corporate purposes’ bucket, which could mean anything from refinancing existing debt to organic expansions to more M&A. I’m betting at least some will fall into that last category again by springtime.
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