Zayo Group provides communications infrastructure services, including fiber and bandwidth connectivity, colocation and cloud services and has headquarters in Boulder, Colorado and London, England. Zayo’s primary customer segments include data centers, wireless carriers, national carriers, ISPs, enterprises, and government agencies. Zayo Group was built largely through acquisitions. It absorbed thirty companies from 2007 to 2014.
Zayo owns a fiber network that spans more than 122,000 route miles in North America and Europe. The network is connected to 29,402 buildings, including 11,300 data centers, 15,300 enterprise buildings, and 6,000 cellular towers. Zayo operates a Tier 1 IP network, with settlement-free peering with all other Tier 1 providers. Additionally, Zayo operates 46 colocation facilities with a combined footprint of 867,000 sq. ft. of sellable space. Zayo's services include dark fiber, wavelengths, SONET, Ethernet, IP services, colocation, wireless backhaul and small cells.
Zayo owns a fiber network that spans more than 122,000 route miles in North America and Europe. The network is connected to 29,402 buildings, including 11,300 data centers, 15,300 enterprise buildings, and 6,000 cellular towers. Zayo operates a Tier 1 IP network, with settlement-free peering with all other Tier 1 providers. Additionally, Zayo operates 46 colocation facilities with a combined footprint of 867,000 sq. ft. of sellable space. Zayo's services include dark fiber, wavelengths, SONET, Ethernet, IP services, colocation, wireless backhaul and small cells.
Acquisition History
Zayo was founded in 2007 by Dan Caruso and John Scarano. In 2007, Zayo acquired Memphis Network, VoicePipe, Onvoy Inc, PPL Telcom and Indiana Fiber Works.
In 2008, Zayo acquired Columbia Fiber Solution, Adesta Communications assets, two sets of fiber assets from Citynet, two sets of fiber assets from Northwest Telephone, and CenturyTel Regional Markets.
In 2009, Zayo acquired FiberNet Telcom Group, Inc.
In 2010, Zayo acquired AGL Networks, American Fiber Systems, and Dolphini’s Cummins Station data center and colocation services.
In 2011, Zayo acquired MarquisNet data center business in Las Vegas, and 360networks.
In 2012 Zayo acquired AboveNet, FiberGate, Arialink, US Carrier Telecom, First Telecom Services, and Maryland-based Litecast/Balticore.
In 2013 Zayo acquired Austin-based data center operator Core NAP, Access Communications, Midwest-based dark fiber operator FiberLink, and Corelink Data Centers.
In 2014, Zayo acquired Dallas-based data center operator CoreXchange, Neo Telecoms, and Geo Networks.
In 2015, the company acquired Latisys, IdeaTek Systems and Viatel. In 2016, Zayo acquired a new Dallas, TX data center from Stream Data Centers, Clearview International and Allstream, Canada's main facilities-based inter-exchange carrier which has its roots in the railway telegraph business CNCP Telecommunications. As of July 2016, Zayo has completed 39 acquisitions.
On November 30, 2016, Zayo Group Holdings Inc said it would buy smaller rival Electric Lightwave for $1.42 billion in cash to expand its fiber network on the U.S. West Coast.
Zayo Group Holdings, Inc., through its subsidiaries, provides bandwidth infrastructure solutions for the communications industry in the United States, Canada, and Europe. The company operates in six segments: Fiber Solutions, Transport, Enterprise Networks, Zayo Colocation (zColo), Allstream, and Other. The Fiber Solutions segment provides dark fiber, and fiber-to-the-tower and small cell mobile infrastructure services for carriers and other communication service providers, Internet service providers, wireless service providers, media and content companies, large enterprises, and other companies. The Transport segment offers lit bandwidth infrastructure solutions comprising wavelength, wholesale IP services, and SONET services through its metro, regional, and long-haul fiber networks for carriers, content providers, financial services companies, healthcare, government entities, education institutions, and other medium and large enterprises. The Enterprise Networks segment provides communication solutions, such as Ethernet, enterprise private and connectivity services, managed services, and cloud based compute and storage products to medium and large enterprises. The Zayo Colocation (zColo) segment offers data center infrastructure solutions, including colocation space, and power and interconnection services to a range of enterprise, carrier, cloud, and content customers. The Allstream segment provides Internet protocol (IP), Internet, voice, IP trunking, cloud private branch exchange, and collaboration services, as well as unified communications for small and medium business customers. The Other segment provides network and technical resources to customers in designing, acquiring, and maintaining their networks. Zayo Group Holdings, Inc. was founded in 2007 and is headquartered in Boulder, Colorado.
(Summary) (Company) (Chart)
| 7 January 2017 Price $36.05 1yr Target $40.62 Analysts 13 Dividend $0.00 Payout Ratio 0.00% 1yr Cap Gain 12.67% Yield 0.00% 1yr Tot Return 12.67% P/E 95.88 PEG 2.43 Beta --- | EPS (ttm) $0.38 EPS next yr $0.59 Forward P/E 61.21 EPS next 5yr 39.40% 1yr Price Support $23.24 Market Cap $8.93 Bil Revenues $2.34 Bil Earnings $93.20 Mil Profit Margin 3.97% Quick Ratio 0.90 Current Ratio 0.90 Debt/Equity 3.81 | 1yr RevGR 27.77% 3yr RevGR --- 5yr RevGR --- 1yr EarnGR --- 3yr EarnGR --- 5yr EarnGR --- 1yr DivGR --- 3yr DivGR --- 5yr DivGR --- ROA 1.10% ROE 6.80% |
My Path Forward
This company is becoming more and more critical to the infrastructure of both the country and the entire world. So to ignore a company like this would simply be silly. But it would also dumb to over pay for a company like this, and right now I would consider this company expensive at 95 times earnings.
The trick here is to try to understand what future earnings will be for a company that expands through acquisition. Apparently future earnings are expected to come in at a growth rate of 40%, but that could easily change if additional acquisitions occur. And that's a very likely possibility. It appears that the only thing that will restrain the company's appetite is it's debt load which is already almost 4 times its equity. That's high by most standards but then this is an infrastructure company.
I'll be looking to start a position in this company if and when the stock pulls back to a more reasonable price. Today that would be closer to $30 per share, but that could change if future acquisitions occur. Basically I currently see this stock as an overpriced stock based on earning projections that could change drastically in the future. Therefore this company is going on my watch list as a potential buy whenever the price pulls back or projected earning growth increases. Both could happen very quickly so this will be monitored closely.
This company is becoming more and more critical to the infrastructure of both the country and the entire world. So to ignore a company like this would simply be silly. But it would also dumb to over pay for a company like this, and right now I would consider this company expensive at 95 times earnings.
The trick here is to try to understand what future earnings will be for a company that expands through acquisition. Apparently future earnings are expected to come in at a growth rate of 40%, but that could easily change if additional acquisitions occur. And that's a very likely possibility. It appears that the only thing that will restrain the company's appetite is it's debt load which is already almost 4 times its equity. That's high by most standards but then this is an infrastructure company.
I'll be looking to start a position in this company if and when the stock pulls back to a more reasonable price. Today that would be closer to $30 per share, but that could change if future acquisitions occur. Basically I currently see this stock as an overpriced stock based on earning projections that could change drastically in the future. Therefore this company is going on my watch list as a potential buy whenever the price pulls back or projected earning growth increases. Both could happen very quickly so this will be monitored closely.
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