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Zayo To Be Purchased By Digital Colony, EQT

Elizabeth Balboa

Zayo Group Holdings Inc (NYSE: ZAYO) company announced a $14.3-billion sale to the EQT Infrastructure IV fund and Digital Colony Partners.

What Happened

Under the terms of the agreement, Zayo will continue to advance its strategy in communications infrastructure but will be taken private under the new ownership. Its shareholders will receive $35 per share. Zayo’s board unanimously approved the transaction.

“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," Yancey Spruill, Zayo's Lead Independent Director, said in a press release. "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."

Why It’s Important

Zayo management anticipates significant growth on the wings of its buyers.

“Digital Colony and EQT share our vision that Zayo's Fiber Fuels Global Innovation,” Zayo CEO Dan Caruso said. “[...] I am confident this partnership with EQT and Digital Colony will empower Zayo to accelerate its growth and strengthen its industry leadership."

Digital Colony has plans for global expansion.

“Zayo has a world-class digital infrastructure portfolio, including a highly-dense fiber network in some of the world's most important metro markets,” managing partner Marc Ganzi wrote. “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.”

What’s Next

The deal is expected to close in the first half of 2020 after the parties receive regulatory clearance and approval from Zayo shareholders.

Zayo shares traded higher by 9 percent to #33.44 per share Wednesday morning.

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