US fibre infrastructure provider Zayo Group has completed its purchase of rival AboveNet for a previously announced US$2.2bn. Zayo has also secured US$3.34bn in equity and debt financing in conjunction with the acquisition, and has refinanced all of its…
US fibre infrastructure provider Zayo Group has completed its purchase of rival AboveNet for a previously announced US$2.2bn. Zayo has also secured US$3.34bn in equity and debt financing in conjunction with the acquisition, and has refinanced all of its own debt and all of Abovenet’s.
Zayo closed US$2.87bn of debt financing plus a US$250m revolving credit facility that remains undrawn.
The debt is made up of a US$1.62bn term loan due in 2019, US$750m of 8.125% senior secured first-priority notes due 2020 and US$500m of 10.125% senior unsecured notes due 2020. Strong demand across all debt tranches led to upsizing the term loan by US$120m, Zayo said. The additional proceeds will be used for general corporate purposes and liquidity.
Zayo also completed the purchase of US$347m of its 10.25% senior secured first-priority notes due 2017, approximately 99% of the US$350m issued. Zayo plans on redeeming the remaining US$3m of existing notes on August 1, 2012 in accordance with the terms of the indenture governing the existing notes.
Morgan Stanley and Barclays Capital were the joint bookrunners on the notes offerings. Morgan Stanley, Barclays Capital and RBC Capital served as joint bookrunners on the term loan facility. SunTrust is acting as the agent on the revolving credit facility.
Zayo has also received US$472m in equity financing after a new funding round. GTCR, a private equity firm, led the funding and made equity commitments to Communications Infrastructure Investments, Zayo’s parent.
Existing investors Charlesbank Capital Partners, Battery Ventures, Centennial Ventures and others also participated in the equity round.
“GTCR is excited to play a key role in this transformative event for Zayo,” said Phil Canfield, Principal at GTCR. “We believe that the combination of Zayo’s management, the combined Zayo and AboveNet assets and the broader bandwidth infrastructure tailwinds will create value for Zayo shareholders.”
