Source: Zayo Group
Zayo Group, LLC and AboveNet, Inc. (NYSE: ABVT) today announced that their boards of directors have approved a definitive agreement under which Zayo will acquire AboveNet for approximately $2.2 billion.
Under the terms of the agreement, each share of AboveNet common stock issued and outstanding immediately prior to the transaction will be entitled to receive $84.00 per share in cash, representing a 13% premium over AboveNet's closing price on March 16, 2012 and a 21% premium over the average closing stock price for the past 60 days.
"AboveNet and Zayo's business models are closely aligned with a disciplined focus on high bandwidth fiber-based communications services for enterprises, government and carrier customers," said Dan Caruso, President and CEO of Zayo Group. "We have admired AboveNet's business model and results and believe the combination will create value for customers, employees and investors."
"Over the last 5 years Zayo has acquired a very impressive set of fiber infrastructure assets," said Bill LaPerch, President and CEO of AboveNet. "The combination of AboveNet's and Zayo's assets creates a dense fiber footprint throughout North America and Europe for a bandwidth hungry world. This new company will be uniquely qualified to meet the expanding needs of enterprise and carrier customers."
As part of the transaction, GTCR, a leading Chicago-based private equity firm, will make an equity investment in Zayo. "We have been looking for opportunities to make investments in the bandwidth infrastructure space and believe the exceptional leadership and assets of the combined company creates an excellent opportunity for our firm," said Phil Canfield, Principal at GTCR. In addition to GTCR's new investment, Charlesbank Capital Partners, a current Zayo investor, will make an additional investment in the company.
This transaction is not subject to any financing conditions. Morgan Stanley Senior Funding, Inc. and Barclays have committed to provide Zayo Group, LLC with sufficient committed debt financing that together with equity commitments from GTCR and Charlesbank Capital Partners will allow Zayo to consummate the acquisition and repay or refinance certain existing indebtedness of Zayo and AboveNet.
The definitive agreement contains a 30-day "go-shop" provision, whereby AboveNet has the right to solicit and enter into discussions with respect to alternative acquisition proposals until April 17, 2012, subject to extension to May 2, 2012 under certain circumstances. There can be no assurance that this process will result in a superior proposal, and the definitive agreement provides Zayo certain rights to match any such proposal. AboveNet does not intend to disclose developments with respect to the solicitation process unless and until its Board of Directors has made a decision with respect to any alternative proposals it receives.
J.P. Morgan acted as lead financial advisor to AboveNet with Moelis & Company LLC acting as co-advisor. Moelis & Company LLC will lead the go-shop process with J.P. Morgan acting as co-advisor. Wiggin and Dana LLP is serving as AboveNet's legal advisor. Willkie Farr & Gallagher LLP is serving as legal counsel to AboveNet's Board of Directors.
Latham & Watkins LLP and Gibson Dunn & Crutcher LLP are serving as GTCR's and Zayo's legal advisors, respectively.
The transaction, subject to customary approvals, is expected to close in mid 2012.
For further information regarding all terms and conditions contained in the definitive merger agreement, please see AboveNet's Current Report on Form 8-K in connection with this transaction, which will be filed later today.