Zayo Group Announces Acquisition of AGL Networks Telecommunications Business
AGL Networks provides Fiber Services in Georgia, Arizona, and North Carolina
LOUISVILLE, Colo. – March 24, 2010 – Zayo Group, LLC, a provider of Bandwidth Infrastructure and Network Neutral Colocation services, announced today that it has reached a definitive agreement to purchase AGL Networks.
Upon close of the transaction, Zayo will acquire 100% of the ownership interest of AGL Networks and thus take over ownership and operation of the existing network of more than 795 route miles and 182,000 fiber miles.
AGL Networks provides Bandwidth Infrastructure services to customers primarily in Georgia, Arizona, and North Carolina. “AGL Networks has amassed impressive regional fiber networks and a solid base of customers,” stated Dan Caruso, President and CEO of Zayo Group. “Zayo Group will continue to support these customers while also offering them similar services on Zayo’s existing network.”
“The employees at AGL Networks have done a great job building a recurring revenue fiber services business,” said Matt Erickson, Corporate Development and Strategy. “With the help of the AGL Networks team, Zayo will invest in continued expansion of AGL Network’s fiber services product offerings.”
The transaction, which is subject to regulatory approvals and customary closing conditions, is expected to close in 60-120 days. The financial terms of the transaction were not disclosed.
___
Dan Caruso Keynote Presentation at Venture Capital in the Rockies Winter: The Soul of a Great Serial Entrepreneur
Louisville, CO (March 2, 2010) – Venture Capital in the Rockies (VCIR) showcases the rocky mountain region’s most promising emerging growth companies for an audience of over 300 venture investors, CEOs, entrepreneurs and service professionals.
This year, Dan Caruso, President and CEO of Zayo Group and Chairman of Envvysion, was invited to give the keynote speech. A video of his speech, “The Soul of a Great Serial Entrepreneur,” is posted at the attached Colorado Tech TV link. In his keynote, Dan talks about one hit wonders, entrepreneurs gone bad and the special breed of great serial entrepreneurs.
Using the great serial entrepreneurs as a backdrop, Dan offers his advice to aspiring entrepreneurs and business leaders. Dan has 22 years of experience in telecommunications and has been involved with several start-up companies in Colorado aside from Zayo including, Envysion, New Global Telecom, ICG and Level 3 Communications.
___
How Big Are Zayo’s Big-City Ambitions?
Sep 18, 2009 12:19 PM, By Ed Gubbins
When Zayo Bandwidth first came on the scene in 2007, it was described as a follower of less-traveled paths and lower-tier markets. A big pipe provider to places like Walla Walla, Washington or Chillicothe, Ohio. Two years and twelve acquisitions later, Zayo is more of a big-city carrier, and it’s not done buying its way to become even bigger.
The company’s 23-state, 19,000-mile network now reaches 129 markets, including 52 major cities. You’ll find it in Miami and Los Angeles and in multiple carrier hotels in the heart of Manhattan, including the major hub at 60 North Hudson. Its base of on-net buildings is growing by 20 to 40 per month and now totals about 2,000 – that’s nearly a quarter the size of tw telecom’s footprint but more than a third bigger than Cogent Communications’. And according to one report, Zayo even tried to buy a nationwide tier-one CLEC last year. Its ambitions have grown far beyond Walla Walla, but to what, exactly?
“We didn’t plan this,” said John Scarano, cofounder and chief operating officer. “We started exclusively in the tertiary markets [because] the assets available to purchase were — and generally, still are — in tertiary, tier-two-plus markets. As that progressed, we developed stronger linkage to adjacent markets, which our customers frankly love. Our network and colocation assets are generally deep and strong in the tertiary markets, which also happen to tie back to the tier-one, NFL markets, which we are doing more and more with additional acquisitions.”
Zayo’s most recent acquisition, its largest yet, took it much further into those NFL cities — a “rare exception” to its buying patterns, Scarano said. Its purchase of FiberNet, for between $90 million and $100 million, will boost Zayo’s annual top line by about a third (or $65 million) and its workforce by about 14%. Zayo closed the deal at $11.45 per share despite a competing bid of $12.50 per share from RCN, which ultimately withdrew its bid, Scarano believes, because its offer was contingent upon securing financing, and Zayo’s was not. (Zayo later announced having secured $30 million in new debt, partly to fund the deal.)
Funding acquisitions hasn’t been a problem for Zayo, which has raised more than $300 million in equity and more than $160 million in debt. Its rapid fiber-buying moves would be reminiscent of the irrationally exuberant 90s but for the fact that the assets are much more affordable now, and the company’s founders – who were employed with fiber-buying national carriers back then – now have the benefit of hindsight. Scarano and Zayo’s cofounder and CEO, Dan Caruso, both formerly worked at Level 3 Communications and ICG Communications.
Asset prices have come up a bit since Zayo first started scooping them up, Scarano said. “The market to purchase infrastructure-based assets has firmed up a bit from where it was, say, two years ago. Whether sellers are motivated is a case-by-case situation. There appear to be two to three competitors to purchase assets as they become available, and the negotiation process is fairly balanced as a result.”
Geographically, most of FiberNet’s assets overlap with existing Zayo assets, but the acquisition fills in a particular gap in Zayo’s footprint: the Northeast. Unlike typical acquisitions, Zayo generally won’t be looking to shed redundant network assets, since they’ll be needed to accommodate future growth, Scarano said. “We do not expect to synergize the assets. The overlap adds depth and some additional redundancy.”
FiberNet also adds “quite a bit” but not “materially” to Zayo’s existing colocation business, contributing those markets in places like Miami, Los Angeles and Manhattan. And it prompted Zayo to add a fourth brand to its Bandwidth, Enterprise Networks and Onvoy Voice Services units: zColo. So what is Zayo becoming?
The Wall Street Journal recently reported that Zayo bid for some or all of XO Communications last year, an eye-raising story, given XO’s relative size (the national carrier reportedly turned down offers approaching $1 billion, the WSJ said) and one that signals far bigger ambitions still for Zayo. Scarano won’t comment on that story aside from calling it “speculation.”
As for what Zayo is becoming, the term CLEC doesn’t fit, Scarano said, pointing out that the company doesn’t do much reselling of other companies’ services, it has its own network facilities and sells bandwidth, interconnection, colocation and “non-regulated, vertically oriented products,” including voice-over-IP and videoconferencing.
But it’s not done evolving. After a dozen acquisitions, Zayo hasn’t stopped shopping for assets. “We’re in discussions with several [potential sellers],” Scarano said.
___
Dan Caruso Named Ernst & Young Entrepreneur of the Year® 2009
Award Winner in the Rocky Mountain Region Dan Caruso, President and CEO of Zayo Group and Chairman of Envysion, Named Ernst & Young Entrepreneur Of The Year® 2009 Award Winner in the Rocky Mountain Region. Award Recognizes Entrepreneurial Excellence in Emerging Category.
___
ZAYO ENTERPRISE NETWORKS ANNOUNCES COMPLETION OF GREAT LAKES INTEGRATION AND LAUNCH OF ETHERNET SERVICES
New Fiber Optic and IP infrastructure to deliver Voice, Internet and Data services in Ohio, Michigan and Indiana
(Louisville, Colo.) July 22, 2009 Zayo Enterprise Networks, a division of Zayo Group and a provider of fiber-based telecommunications solutions for business, government and education, announced today it has completed the implementation of its new network infrastructure and migration of its existing customers to the new network. This completes the integration of customers included in an acquisition of five city markets from CenturyTel in July, 2008. Additionally, Zayo will now be delivering Ethernet services to customers in these markets.
The new network includes: Akron and Toledo, OH; Ann Arbor and Lansing, MI; and Ft. Wayne, IN. The customers in these markets are now fully transitioned to the Zayo network and will have access to advanced IP communications services including Voice Over IP, Hosted PBX, Internet Access and Private Data Networks.
“We are pleased to offer our IP-based communication solutions and scalable bandwidth services in these markets. This investment can be leveraged by our current and future customers to support their cost effective business growth.” said Glenn Russo, President of Zayo Enterprise Networks.
Now that the integration is complete, Zayo has also announced that it is offering fiber based Ethernet services in these markets to deliver cost effective local and wide area communications. By leveraging Zayo’s fiber footprint in these metro areas and across the region, customers will be able to take advantage of the cost and ease of use benefits of Ethernet solutions.
About Zayo Enterprise Networks Based in Louisville, Colo., Zayo Enterprise Networks ( www.zayoenterprise.com) provides voice, data, collocation and video telecommunications solutions to businesses, schools, hospitals, government agencies and non-profit organizations across the United States. Large, multi-site corporations to small, single-site agencies rely on Zayo Enterprise Networks for their communications needs.
About Zayo Group Based in Louisville, Colo., Zayo Group (www.zayo.com) is a regional provider of telecom services including bandwidth, voice and managed services to carrier, enterprise, SME and government customers. Zayo Group currently provides its service over a fiber network that spans 129 markets in 23 states. Zayo Group consists of three complementary business units: Zayo Bandwidth, Zayo Enterprise Networks and Onvoy Voice Services.
For more info contact:
Katie McCoy
kmccoy@zayo.com
303-381-3273
___
Louisville, CO, June 19, 2009 – Dan Caruso, CEO of Zayo Group and Chairman of Envysion received the Ernst & Young Entrepreneur Of The Year® 2009 Award in the Emerging category in the Rocky Mountain Region. According to Ernst & Young LLP, the award recognizes outstanding entrepreneurs who are building and leading dynamic, growing businesses. Dan was selected by an independent panel of judges, and the award was presented at a gala event at the Grand Hyatt in downtown Denver on June 18, 2009.
Zayo congratulates all of Ernst & Young Entrepreneur Of The Year® 2009 Award
winners in the Rocky Mountain Region:
- Frank Backes (Services)
- John Tredennick (Technology)
- Barry W. Cooper (Consumer Products )
- Robert Levitt (Real Estate and Construction Services)
- David Chernow (Healthcare and Medical Equipment)
- Roy Dimoff (Communications)
The Ernst & Young Entrepreneur Of The Year awards celebrate their 23rd anniversary this year. The program honors entrepreneurs who have demonstrated exceptionality in such areas as innovation, financial performance and personal commitment to their businesses and communities.
As a Rocky Mountain Region award winner, all 7 are eligible for consideration for the Ernst & Young LLP Entrepreneur Of The Year 2009 national program. Award winners in several national categories, as well as the overall national Ernst & Young Entrepreneur Of The Year award winner, will be announced at the annual awards gala in Palm Springs, California on November 14, 2009.
Dan is currently President and CEO of the Zayo Group (www.zayo.com) and executive chairman of Envysion (www.envysion.com). He is also a board member of GTS Telecom (www.gtsce.com) and New Global Telecom (www.ngt.com).