Zayo to Buy Datacenter Operator Latisys in $675M Deal

Zayo Group is a public company now, and that hasn’t changed the Boulder, CO-based telecom provider’s acquisitive ways. Zayo announced Wednesday it has reached an agreement to buy Latisys, another Colorado company, for $675 million in what will be the second largest of Zayo’s 34 acquisitions.

It’s a deal that marks Zayo’s (NYSE: ZAYO) expanding reach as the broadband services and infrastructure provider spends more to acquire data centers and build its colocation services business.

Latisys was founded in 2007 and is based south of Denver. The company has eight datacenters in Northern Virginia, Chicago, Denver, Orange County, and London. All but Chicago are new markets for Zayo, and each of Latisys’s datacenters are in cities where Zayo owns networks.

Zayo built itself by buying up smaller telecom providers that had built regional and metropolitan fiber optic networks while also building assets of its own. Zayo has bought 34 companies since it was founded in 2007, for a total of more than $5.3 billion. The Latisys acquisition is second in size only to Zayo’s 2012 purchase of AboveNet for $2.2 billion.

A statement from Zayo said the pairing will allow it to sell fiber and bandwidth services to Latisys’s core set of enterprise customers and to market new colocation and infrastructure services to Zayo’s customers, which include wireless and telecom service providers, media and Web content producers, and government agencies. The company expects that data storage and processing is converging with connectivity, and that offering both will be a competitive edge.

Latisys has about 1,100 customers that are predominantly medium to large enterprises. The company reportedly has more than $100 million in annual revenue.

The deal is expected to close this quarter. When it does, Zayo will own 45 datacenters in the U.S., United Kingdom, and France.

Zayo also continues to add to its fiber optic network, which now spans more than 81,500 route miles. The company recently closed its acquisition of IdeaTek Systems, which it bought for $52 million in a cash deal. IdeaTek adds 1,800 route miles in Kansas to Zayo’s network.

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