One of the largest leveraged buyouts since the financial crisis

A pair of private equity groups has clinched a $14.3 billion deal to take over Zayo Group, the owner of fibre optic cables that stretch across the US and Europe, in one of the largest leveraged buyouts since the financial crisis. Digital Colony Partners and EQT have agreed to pay $35 a share in cash as part of the deal and assume Zayo’s $5.9 billion of net debt… The deal comes as private equity groups hunt for assets in an attempt to put some of their roughly $1.2 trillion of dry powder to work. While buyout firms were able to clinch a number of big deals last year — including Blackstone’s $17 billion purchase of a stake in Thomson Reuters’ financial terminals business and the $13.2 billion takeover of the power unit of Johnson Controls by Brookfield Asset Management’s private equity arm — several fell apart, leaving funds seeking new businesses to buy… The wave of buyouts shows the ease with which private equity groups can finance theirmultibillion-dollar takeovers. Debt remains relatively cheap, despite intensifying fears of a recession… Zayo has been on a buying spree to try to make its broadband the key connector between companies and data centres managed by the likes of Amazon… Demand for reliable connectivity has become critical for increasingly data-driven companies such as Netflix, Google and Apple.
Eric Platt and James Fontanella-Khan