When going gets rough, Zayo Group gets going

BOULDER – Building upon one of the trickiest markets in the world economy, broadband infrastructure, Zayo Group LLC saw its revenues grow 244 percent from 2011 to 2013. That may only rank the company third in BizWest’s Mercury 100 list of fastest-growing companies in Boulder and Broomfield counties for companies reporting more than $2 million in annual revenue, but make no mistake: Zayo Group is involved in a very heady financial game.

Starting with just the raw numbers, Zayo saw its revenues increase from $288 million to $988 million during that period, and in just the last few months has acquired an $80 million French broadband company and announced rapid expansion and infrastructure commitments in northern California, New York, Chicago and Kansas City,

 “Zayo Group has come a long way over the last seven years by building and acquiring a strong bandwidth infrastructure across the U.S. and beyond,” said Dan Caruso, chief executive of Zayo Group. “Our success is based on several factors: creating and maintaining a fulfilling work environment for our employees, delivering great solutions and outstanding service to customers, and creating value for our investors. We’re thrilled to do this in the heart of Boulder County’s entrepreneurial scene.”

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Zayo Group was founded in 2007, with several key players, including Caruso, coming from another significant local broadband company, Level 3 Communications Inc. (NYSE: LVLT). While the Broomfield-based carrier still sees about eight times the annual revenue as does Zayo, make no mistake: The new guys came to play.

In the first year of operation alone, Zayo secured about $310 million of funding. When the going got rough the following year, the tough kept buying. By 2012, the company was completing the financing of $3.3 billion in equity and debt in conjunction with the close of its acquisition of AboveNet.

Today, Zayo boasts about 77,000 network miles serving seven countries, 45 states and some of the biggest U.S. and European cities. Zayo delivers managed services and dark-fiber products to wireline and wireless customers, data centers, Internet content providers, high-bandwidth enterprises and government agencies, and also owns 204,000 billable square feet of co-location and interconnection space.

While the company has been silent about reported plans to soon go public, a Reuters UK article earlier this month reported the Zayo Group had picked investment banks Barclays and Morgan Stanley to lead the initial public offering. Sources indicated that Zayo Group could be valued at as much as $7 billion.