News

U.S. communications infrastructure provider Zayo Group Holdings Inc said on Wednesday it agreed to be sold to investment firms Digital Colony Partners LP and EQT for about $8.2 billion in cash.

The deal value of $35 per share is at a premium of 14.3 percent to Zayo’s closing price on Tuesday.
Including Zayo’s debt of $5.9 billion, the deal is valued at more than $14 billion.

Zayo operates a 209,214 km fiber network in the United States and Europe to connect data centers and serves wireless and landline phone companies. It stands to benefit from rising demand for bandwidth in their markets, driven by cloud computing and streaming.

In March, activist hedge fund Starboard Value LP has urged Zayo to consider a sale after taking a 4 percent stake in the company.

Reuters exclusively reported last month about the potential deal.

Boulder, Colorado-based Zayo said in November it would break itself up into two companies. However, in February, the company said it was not in its best interest to pursue a public spinoff as part of its strategic review.

The company had earlier rejected acquisition offers, including from a private equity consortium comprising Blackstone Group LP, Stonepeak Infrastructure Partners LP, KKR & Co Inc, I Squared Capital, Charlesbank Capital Partners and GTCR Ltd.

Zayo will become a private company after the deal closes in the first half of 2020.

Shares of Zayo were up 9 percent at $33.40 in premarket trading.