Data Center Finance: Zayo Closes Acquisition of Latisys

Bandwidth infrastructure services provider Zayo Group Holdings announced in late February that it had closed on the acquisition of colocation and infrastructure-as-a-service provider Latisys Holdings, LLC. The purchase was completed for a final total of $675 million.

Latisys was made up of two distinct business segments: colocation and cloud. The colocation segment accounted for approximately 75 percent of the company's revenue and the cloud business made up the other 25 percent. The colocation subsector will become part of Zayo's colocation segment and is expected to increase its annualized revenue by 80 percent, growing to approximately $183 million.

The acquisition will add eight new facilities to Zayo's strategic data center product group, zColo, and increases the company's billable data center space to a total of 503,000 square feet, an increase of approximately 60 percent. With the new locations, Zayo's total data center footprint in the U.S. and Europe is brought to 45 facilities. ZColo will now have a presence in four new markets, including Orange County, Denver, Ashburn and London, as well as an increased Chicago data center footprint.

"The acquisition of Latisys extends Zayo's breadth and depth in the data center space and further enhances our infrastructure-based business model," said Dan Caruso, chairman and CEO of Zayo Group. "We will now be able to offer rich connectivity solutions to Latisys customers, while addressing increasing demand for colocation and IaaS solutions within our existing customer base."

Latisys' data center and IaaS portfolio will immediately be made available to the entire Zayo customer base and Latisys customers will also have access to Zayo's expansive fiber, transport and IP network assets.

Brought to you by WiredRE, the nation's leading cloud, colocation, and data center advisory firm.