Wed 05/08/2024 08:16 AM
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Editor's Note: This story has been updated to fix the quarterly column headers in the financial table below and to show consolidated revenue and EBITDA.
Credit Research: Mark Fischer

Zayo Group said in a press release yesterday, Tuesday, May 7, that planning is underway for the carve-outs into independent entities of its European business and its business that manages customer needs outside of the company's North American and European market. Full legal separation is expected in the second half of this year.

Both of the new entities will have separate management teams and boards of directors.

Zayo Europe, according to the release, operates a largely autonomous, mostly-owned fiber infrastructure network across eight Western European countries. Zayo Europe will have a new board of directors, including Jens Schulte-Bockum as chairman of the board. Schulte-Bockum is the former CEO of Vodafone Germany and Group COO of MTN Group. The company added that both Zayo and Zayo Europe will remain “under the same ownership group” and offer network services globally through “formal contracts.”

Zayo’s business that manages its customers’ global network needs outside of Zayo’s core North American and European networks will continue to support North American and European customers’ international network expansions.

The company’s long-term debt sits at $9.45 billion, according to sources, a 5.6% increase from the same period a year earlier.

LTM free cash flow was negative $447 million.
Net secured leverage came in at 6x based on reported pro forma adjusted EBITDA, which adds back planned cost savings and run-rate bookings, net of churn.

Excluding these addbacks, LTM adjusted EBITDA totaled $1.026 billion, resulting in net secured leverage of 8.1x and total net leverage of 9.1x.

The company’s capital structure as of March 31 is shown below and available for download HERE:

Market prices for the company’s secured notes due 2027 have hovered around 80 for most of the year, according to Solve.

Zayo and sponsors EQT Partners and DigitalBridge did not immediately respond to requests for comment.
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