Zayo advancing evaluation of REIT conversion

Zayo Group Holdings, Inc. (NYSE: ZAYO) has announced that it has completed the first phase of its investigation on the advisability and feasibility of a conversion to a real estate investment trust for federal income tax purposes (a “REIT”), working diligently over the past several months both internally and with external advisors, including J.P. Morgan Securities LLC, Sullivan & Worcester LLP, and KPMG, the company said.

Zayo has also closely followed market developments in the fiber optic cable space, including speaking with other similarly situated companies and learning from their experiences.

Zayo has been exploring the possibility of pursuing conversion to a REIT. Based on its findings, it is likely Zayo will have alternatives that would enable REIT conversion and, as a result, has begun the next phase of evaluation and preparation. To that end, Zayo has begun a direct dialog with the IRS in an effort to obtain clarity and support for its position, which may include seeking a private letter ruling from the IRS.

Zayo has also begun to execute the organizational changes that are required to operate as a REIT, including the realignment of its business segments to clearly delineate the leasing of network assets from ancillary services, which includes the separation and potential divestiture or deconsolidation of Zayo´s Allstream business segment. Finally, Zayo is assessing what changes may be required to its financial systems and reporting that would be required in connection with any conversion to a REIT.

Zayo Group Holdings provides communications infrastructure solutions, including fiber and bandwidth connectivity, colocation and cloud infrastructure to the world´s businesses. Customers include wireless and wireline carriers, media and content companies and finance, healthcare and other large enterprises. For more information, visit zayo.com.