Zayo Makes a Big Data Center Deal

January 14th, 2015 by · 3 Comments

In its largest inorganic move in the data center world so far, Zayo today announced an agreement to acquire Latisys.  The price tag of $675M makes this the company’s biggest move since the acquisition of AboveNet two and a half years ago.  It takes Zayo much deeper into the data center market than it has gone with its zColo division thus far.

Latysis operates some 8 facilities in the five markets of Northern Virginia, Chicago, Denver, Southern California, and London with a total of 185k square feet of space fed by 33MW of power.  That will boost Zayo’s colocation footprint by more than 40% to more than 450,000 square feet, and will fit nicely with Zayo’s deep fiber footprint in each of those markets.

But more interestingly, perhaps, Latisys is not just the sort of interconnection-focused, space and power colo business Zayo has usually focused on.  Their customers are about 1,110 medium and large enterprises, and their main products include IaaS-powered managed hosting, storage and raw computing capacity.  Those are products Zayo doesn’t yet offer directly, and thus it should be interesting to see what they do with the broader portfolio going forward.  There is plenty to roll up in this sector two if Zayo’s M&A appetite just got more diverse.

Latisys did $11M in EBITDA for the third quarter of 2014, and $4.2M for the month of November.  No doubt we will learn more of the details when Zayo posts its fiscal Q1 earnings next month.

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Categories: Datacenter · Mergers and Acquisitions · Metro fiber

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3 Comments So Far

  • b says:

    This is a well needed acquisition by Zayo on the data center front. Latisys has a large Denver presence that will provide Z with something in its hometown.

    And more importantly, Latisys data centers are far better tiers/quality and more robust than anything zcolo has. I just hope they are able to keep Pete Stevenson.

    All this for 13.4x on Nov. EBITDA….

  • John P. says:

    I feel sorry for all the Latisys people that are about to lose their jobs no matter what they have been told.

  • Anonymous says:

    A blessing in disguise

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