Zayo Group Sets IPO Range, Could Raise $232M

Zayo Group Holdings, a Boulder-based telecom infrastructure company, has set the price range for its upcoming initial public offering.

The company and some of its previous investors are looking to sell a combined 28.9 million shares of stock, priced between $21 and $24 per share, according to a statement released this morning and its updated prospectus.

Zayo itself is offering 11.1 million shares, which would bring the company about $232 million at the middle of its price range, after deducting its IPO costs. At that price, the post-IPO  market capitalization of Zayo would be about $5.27 billion, according to the prospectus.

Zayo would trade on the NYSE under the “ZAYO” ticker symbol. The company did not set a date for the offering.

Zayo has lost money since its founding in 2007, and those losses have grown significantly in the past couple of years as the company spent heavily on infrastructure and corporate acquisitions. Over its history, Zayo has shelled out nearly $4 billion to buy out 32 companies.

In its most recent fiscal year, which ended June 30, Zayo took in revenues of $1.12 billion, but netted a loss of $179 million.

Like many telecom infrastructure providers, Zayo hopes to make a return on its heavy up-front investments by collecting service fees for many years from companies that need to access its network.

Its aggressive growth strategy has enabled Zayo to become a substantial telecom services provider, with an 81,000-route mile network that reaches nearly than 320 markets in the U.S. and Europe. There are 37 datacenters and more than 15,000 buildings on Zayo’s network.

The company sells access, typically on a monthly contract, to fiber-optic networks, Ethernet connections, and other “high-bandwidth offerings,” it writes in the SEC filing. Customers include wireless providers, finance firms, Internet companies, healthcare establishments, and government agencies.

If there’s more demand for Zayo’s stock, the company’s IPO underwriters can buy another 4.3 million shares to sell.

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