Zayo Group Holdings has agreed to be bought by Digital Colony Partners and an EQT infrastructure fund in a deal valued at $14.3bn (€12.77bn).
Digital Colony and the €9bn EQT Infrastructure IV fund have agreed to offer the communications infrastructure provider’s shareholders $35.00 in cash a share, including the assumption of $5.9bn of Zayo’s net debt obligations.
The offer price represents a 32% premium to the share’s average price of $26.44 during the last six month.
Yancey Spruill, Zayo’s lead independent director said following a comprehensive review of strategic alternatives, the Zayo board of directors concluded that the sale of Zayo to Digital Colony and EQT Infrastructure is in the best interest of Zayo and all its stakeholders.
“The transaction delivers immediate and substantial value to shareholders and will strengthen Zayo’s financial flexibility, enabling the company to increase investments and better position itself for long-term growth and profitability,” Spruill said.
Zayo’s 130,000-mile network in North America and Europe includes connectivity to thousands of buildings and data centres. The company owns 51 data centres across North America and Europe
Dan Caruso, Zayo’s chairman and CEO, said both Digital Colony and EQT are experienced global investors in the communications infrastructure space, and they ”appreciate our extraordinary fibre infrastructure assets, our highly talented team and our strong customer base”.
Marc Ganzi, managing partner of Digital Colony, said: “We believe the company has a unique opportunity to meet the growing demand for data associated with the connectivity and backhaul requirements of a range of customers.
“We are excited to work alongside the management team and EQT to grow the business and expand its presence in the global market.”
Jan Vesely, partner at EQT Partners, investment advisor to EQT Infrastructure, said: “As one of the most active global infrastructure investors with a demonstrated track record of success in the telecommunications and fibre industry, we are confident that EQT, along with Digital Colony, are ideal partners for Zayo as the Company embarks on its next phase of growth.”
The deal, which is subject to customary conditions, is expected to close in the first half of calendar 2020. The transaction would result in Zayo becoming a private company.