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News & Press: Colorado Technology Industry

Boulder-based Zayo makes 29th acquisition

Monday, March 10, 2014   (0 Comments)
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As reported in Boulder County Business Report:

BOULDER - Bandwidth infrastructure provider Zayo Group LLC announced on Thursday that its colocation division, zColo, has acquired Dallas-based CoreXchange Inc. for $17.5 million in cash.

The acquisition is the 29th for Boulder-based Zayo, which has grown aggressively since its founding in 2007. 

CoreXchange is a data center, bandwidth and managed services provider. The purchase increases Zayo's colocation presence in Dallas, where it already has a dense fiber-optic footprint. With the purchase, zColo gains 18,000 square feet of data center space in two locations and increases its number of national data centers to 27.

The data centers are secure facilities that have environmentally controlled cooling where customers can house equipment like servers and network gear. 

CoreXchange has more than 500 customers at its two locations in Dallas. Zayo's fiber network in Dallas, meanwhile, includes more than 500 route miles and more than 250 on-net, or fiber-optic-connected, buildings.

"We like to go into markets and acquire data centers where we have a strong, dense dark fiber network," Zayo president Chris Morley said. "We think there's strong synergy between a data center business and pairing it with those fiber connectivity assets."

As part of the deal, Zayo also acquires ColoUnlimited, CoreXchange's online platform that facilitates real-time sales and ordering of colocation services. ColoUnlimited will be integrated into Zayo's recently announced Internet Portal, Tranzact, in the second quarter of this year.

CoreXchange has about 30 employees, though Morley said it remains to be determined how many will be retained. CoreXchange revenues were not disclosed.

Zayo officials have stated that the company is eyeing the possibility of an initial public offering within the next couple of years as it continues to grow and early investors seek to cash out. More acquisitions seem likely given Zayo's past strategy, though Morley didn't specify any such plans Thursday.

"Certainly it's been a key part of our business," Morley said. "Nothing set in stone yet."

In February, Zayo reported revenue of $273.6 million for the company's second fiscal quarter ending Dec. 31, with a net loss of $36.3 million. 

The company moved its corporate headquarters last spring from Louisville to the Twenty Ninth Street retail district in Boulder, though it retained its offices in Louisville and the Denver Tech Center. Zayo employs 1,375 people worldwide, including about 410 in Colorado.

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