EQT-Backed Zayo in Lead to Buy Crown Castle Assets in Deal Above $8 Billion, Source Says

Zayo Group, backed by private equity firm EQT, is reportedly in the lead to acquire the fiber and wireless assets of Crown Castle, with the deal potentially valued at over $8 billion, according to a source familiar with the matter. The acquisition would involve Crown Castle's fiber business and its small cell division, which provides wireless services and technology.

Zayo, which is owned by EQT AB and DigitalBridge, is competing with TPG for the assets, with both units valued at less than $5 billion each. If both assets are sold, the deal could be worth between $8 billion and $10 billion. The source cautioned that the transaction is still several weeks away and not imminent, and another suitor could potentially approach Crown Castle.

The potential acquisition comes at a time when dealmaking in the fiber industry is heating up, driven by the rapid growth of fiber broadband, which provides a major boost to infrastructure providers, making them attractive acquisition targets. Crown Castle, TPG, EQT, and DigitalBridge declined to comment, while Zayo did not immediately respond to requests for comment.

Crown Castle, a telecommunications infrastructure provider based in Houston, Texas, operates over 40,000 cellular towers across the United States and has a market capitalization of approximately $52 billion. The company has grown its fiber business through multiple acquisitions since entering the sector in 2015 but has faced financial challenges due to the high costs of building fiber infrastructure. Crown Castle is now looking to focus on its tower business, which is expected to benefit from the largest U.S. carriers upgrading their networks to 5G and increasing capacity to meet booming data demand.

The company has been exploring options for its fiber assets after reaching a deal with activist investor Elliott Investment Management to shake up its board. In February, Crown Castle's co-founder Ted Miller told Reuters that the company could fetch as much as $15 billion by selling its fiber assets if it let him and his partners join its board of directors. In June, the company cut its annual profit forecast and said it would lay off 10% of its workforce as a result of an operational review of its fiber business.

Zayo, headquartered in Boulder, Colorado, was privatized in 2019 by EQT and DigitalBridge's infrastructure fund, then known as Digital Colony. Zayo operates a 145,000-mile fiber network across North America and Canada, connecting wireless carriers, cloud service providers, data centers, and large enterprises.



The potential acquisition of Crown Castle's fiber and wireless assets by Zayo Group aligns with Zayo's long-term strategic goals and growth prospects, as it would expand Zayo's fiber network and diversify its revenue streams. The acquisition could also lead to potential synergies and cost savings through the integration of Crown Castle's assets into Zayo's existing business. However, the regulatory and competitive landscape considerations could impact the final valuation and terms of the deal, as regulators may require divestments or other remedies to maintain competition in the fiber and wireless markets.