Triton Research Launches Coverage of Upcoming IPO Zayo Group

August 20, 2014 11:41 AM EDT

Triton Research initiated coverage on the upcoming IPO for US Telecommunications infrastructure provider, Zayo Group, with a 7.05 rating, which is slightly above the firm's average IPO rating of 6.56.

"Zayo Group generates over $1bn in revenue and exhibits impressive customer retention and per customer revenue growth," Triton Research said in its report. They added, "Management is solid and has used prior telecom experience to build the business in a relatively short amount of time. Zayo has been acquisitive (completed 30 acquisitions), so it will be difficult to estimate the real profitability of the company once its growth rate normalizes. Other issues for Zayo include its $2,970.7mn in total debt (as of Mar. 31, 2014) and the possibility of issues arising in the overall telecom industry."

Lead underwriters for the deal are Morgan Stanley, Barclays and Goldman, Sachs & Co.. Investors include Battery Ventures, Charlesbank Capital Partners, Columbia Capital, GTCR, M/C Partners, and Oak Investment Partners.

Zayo Group's IPO is still a month or two away. The company has not yet selected a ticker symbol or exchange. The IPO roadshow is expected to launch in September.

Triton Research has a 71-page write-up on Zayo Group available to clients.

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