Zayo Group, a US-based provider of telecom equipment services, has agreed to buy First Telecom Services for $110m in order to expand its network.
First is a portfolio company of private equity firm Gores Group and New York-listed utility FirstEnergy.
The deal follows July’s closure of Zayo’s $3.3bn equity and debt refinancing of the company as part of its earlier purchase of AboveNet.
Zayo shareholders include venture capital (VC) firms Battery Ventures, Bridgescale Partners, Centennial Ventures, Charlesbank Capital Partners, Columbia Capital, GTCR, M/C Partners and Oak Investment Partners and investment bank Morgan Stanley’s Alternative Investment Partners unit.
In Venture Capital Rundown, a quarterly report by data firm PitchBook, a record number of venture capital exits in 2012 were coming from private equity firms buying portfolio companies from VCs, including 18 such buyouts in the third quarter.
These deals included Carlyle Group buying Luxology via its software portfolio company Foundry Visionmongers.
Private equity buyers have been replacing corporate buyers, Pitchbook said after they made up 72% in the third quarter – the lowest share of exits since the second quarter of 2007.
Investments by US-based VC firms fell 12% last quarter to $6.49bn, according to accountancy firm PricewaterhouseCoopers, local trade body National Venture Capital Association, and news provider Thomson Reuters.
VCs backed 890 companies in the third quarter, compared with 992 companies a year earlier.