UPDATE: Oppenheimer Reiterates Outperform Rating, Raises PT on Zayo Group Holdings on Latisys Acquisition

In a report published Friday, Oppenheimer analyst Timothy Horan reiterated an Outperform rating on

, and raised the price target from $30.00 to $35.00. In the report, Oppenheimer noted, “Zayo announced it acquired Latisys, a datacenter company with 45 facilities in the US, France and the UK, for $675M. The acquisition will be funded using debt and is expected to close in CY1Q15. Zayo paid ~13.5x EBITDA on a trailing basis, and we believe EBITDA is growing by at least 15% annually. Further, these buildings are already on-net and have additional capacity available which will allow management to drive synergies (on avg synergies have been ~40% of acquired EBITDA). These assets are highly REITable, and we believe increase the likelihood that Zayo operates as such in the long term after NOLs are used. We increase our price target to $35 from $30 on this increased probability/continued accretive acquisitions.” Zayo Group Holdings closed on Thursday at $30.22.