Zayo Group announces restructuring, $102M acquisition

BOULDER — Bandwidth infrastructure provider Zayo Group Holdings Inc. (NYSE: ZAYO) on Tuesday morning a reorganization of the company, as well as the planned $102 million acquisition of European provider Viatel.

The announcements came on the same day the Boulder-based company reported a net loss for its first fiscal quarter of $15.2 million, or 6 cents per share.

The restructuring will entail the company organizing into to principal operating units — a Strategic Business Segments unit headed by co-chief operating officer Chris Morley, and a Global Sales and Customer Success unit, headed by co-COO Matt Erickson.

The Strategic Business Segments unit will encompass Zayo’s reportable segments, and beginning with the next quarter the company will begin publicly reporting financial resorts as four segments: Dark Fiber Solutions, Colocation and Cloud Infrastructure, Network Connectivity, and Other.

The Global Sales and Customer Success unit, meanwhile, will include sales; sales and engineering solutions; strategic marketing and alliances; Tranzact, IT, Big Data, Billing and Client Services; and Security.

The company said Karl Maier has joined the company as president of International, replacing David Howson. Chris Yost is serving as interim General Counsel, replacing Scott Beer. And zColo president Stephanie Copeland has also decided to leave the company, Zayo officials announced.

“Today’s announcement represents the next step in Zayo’s evolution,” CEO Dan Caruso said in a release. “Over the past eight years, we’ve grown from a startup to an almost $1.5 billion revenue bandwidth infrastructure leader. These changes will accelerate our positive momentum and intensify our focus on key global opportunities.”

The acquisition of Viatel, a subsidiary of Dublin, Ireland-based Digiweb Group, gives Zayo an 8,400-kilometer fiber network that is spread across eight countries, including 12 metro networks and seven data centers. The deal also includes two subsea cable systems that provide connectivity between London and Amsterdam and between London and Paris.

The all-cash acquisition is expected to close by the end of the year.

“Viatel’s long-haul fiber network and cool assets combined with Zayo’s existing national UK, France and U.S. networks provides truly international, seamless connectivity for Zayo’s existing and new customers,” Caruso said, noting that the deal also entails connectivity to key systems that deliver traffic to Asia and Africa.

Zayo reported $366.8 million in sales for the fiscal quarter ending Sept. 30, up from $320.6 million the same period a year earlier. The net loss was an improvement over a $110.5 million net loss for the quarter last year. But it was down from a profit of $5.1 million in the quarter ending June 30, and fell short of analyst expectations.

Before all the announcements, Zayo shares had closed at $25.79 Monday.

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