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Case Study

Zayo

Situation

Zayo is a leading pure-play provider of bandwidth infrastructure including bandwidth, dark fiber and network-neutral colocation and managed services to telecom carriers, large enterprises and government entities. In 2008, Charlesbank launched a thematic investment initiative in a segment of the telecom industry that was then broadly misunderstood. We identified Zayo, which was in need of a second major round of capital to fund acquisitions and significant growth capital expenditures in its efforts to consolidate under managed bandwidth infrastructure assets with long-term strategic value.

Transaction

The Charlesbank team had a longstanding relationship with Zayo’s founder/CEO and reengaged in dialogue to provide the required growth financing. The credit environment, prevailing investor skepticism around competitive telecom and the contrarian nature of our interest created an opportunity to structure an attractive investment with a well-controlled risk profile.

Charlesbank Role

Equity Financing: Led major equity round in early 2009, enabling Zayo to take advantage of compelling acquisition opportunities during historic economic downturn

Strategy Development: Key thought partner for management on M&A, capital markets and organizational matters

Acquisitions: Held lead role in transformational AboveNet transaction, including anchoring Series C Equity round and helping recruit key new investor

Steady Leadership: Held lead governance roles on board of directors pre- and post-2014 IPO

Results

Zayo experienced tremendous growth during our investment period due to continuous M&A activity as well as strong organic growth. Under our ownership, the company closed over 25 acquisitions, completed a successful IPO and consistently posted strong revenue and EBITDA growth, creating significant equity value. We sold our position in periodic installments, completing our final exit in 2016.

Website

http://www.zayo.com
Key Team Members
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