AboveNet, which is also in the business of providing bandwidth services, operates a fiber network of about 13,000 in mostly metropolitan areas. This business will then be combined with Zayo’s 45,000-route-mile network that covers 42 states. Both companies primarily provide service to enterprise-level customers, carriers, and governments.
“AboveNet and Zayo’s business models are closely aligned with a disciplined focus on high bandwidth fiber-based communications services for enterprises, government and carrier customers,” said Zayo President and CEO Dan Caruso in a statement about the deal. “We have admired AboveNet’s business model and results and believe the combination will create value for customers, employees and investors.”
As part of the deal, Chicago-based private equity firm GTCR will make an equity investment in Zayo. Current investor Charlesbank Capital Partners will also make an additional investment in the company. The acquisition deal contains a 30-day “go-shop” provision — meaning AboveNet has the right enter discussions with other companies about acquisition offers until April 17, 2012. The transaction, subject to customary approvals, is expected to close in mid 2012, according to Zayo.
Founded in 2006, the Louisville, Colo.-based company has a total of $225 million in funding to date. Zayo reported a $3.6 million loss on revenue of $319.4 million for the year (ending Dec. 31).