Fiber network company Zayo taps banks for IPO

By Nicola Leske and Greg Roumeliotis

May 8 (Reuters) - Zayo Group LLC has picked investment banks Barclays Plc (LSE: BARC.L - news) and Morgan Stanley (Berlin: DWD.BE - news) to lead an initial public offering of the fiber network company later this year, according to people familiar with the matter.

An IPO could value the company at close to $7 billion, the people said.

All the sources asked not to be named because the matter is not public. Barclays declined to comment while a Morgan Stanley spokeswoman did not respond to a request for comment.

"Zayo is a financially driven organization and remains open to all future opportunities. We will keep you informed when we have news to share," a Zayo spokesman said, declining to comment further.

Reuters reported in April that Zayo, which competes with CenturyLink Inc (NYSE: CTL - news) and Equinix Inc (NasdaqGS: EQIX - news) , was exploring a public listing and speaking to investment banks.

Based in Boulder, Colorado, Zayo is backed by private equity and venture capital firms which include GTCR LLC, Oak Investment Partners (Other OTC: PGPHF - news) , M/C Partners, Columbia Capital and Charlesbank Capital Partners.

Its regional and metropolitan fiber networks allow its customers, which include telecommunication carriers and companies in various sectors, to transport data, voice, video, and Internet traffic, as well as to interconnect their networks.

Founded in 2006 by former Level 3 executives Dan Caruso and John Scarano, Zayo became a bandwidth infrastructure powerhouse in 2012 through its $2.2 billion acquisition of AboveNet, a provider of fiber optic networks for businesses.

Zayo now has a network covering seven countries, connecting the largest U.S. and European cities. The network reaches 14,190 buildings, including 622 data centers, according to its website.

Zayo had annualized earnings before interest, tax, depreciation and amortization of $646 million as of December 2013, up from $556 million as of December 2012, according to an earnings supplement published on its website. (Additional reporting by Soyoung Kim in New York (Frankfurt: HX6.F - news) ; Editing by Cynthia Osterman)