M&A Roll-Up Playbook: The IRR Framework That Replaced Budgets at Zayo | Dan Caruso (Part 2)

Dan Caruso, Managing Director, Caruso Ventures; Founding CEO of Zayo Group

This is Part 2 of our conversation with Dan Caruso, founder and former CEO of Zayo Group. Be sure to start with Part 1. It covers the Zayo thesis, deal sourcing, structure, and the negotiation playbook, whereas this episode picks up at the execution.

Part 2 is about the equity value-creation framework Dan built at Zayo, applying the same IRR math PE firms use for their portfolio companies to daily operating decisions. It replaced budgets and tied every compensation decision to a single equation. It ends with the exit and how Dan put together a competing bid after a buyer consortium locked up the debt market.

What You'll Learn

• How Zayo's integration process matured across 45 deals + where it broke post- IPO
• The equity value creation model: the IRR metric that replaced budgets and tied compensation to a single equation
• Negotiation tactics: countering lower, manufacturing urgency, and splitting the CEO from their investor at the table
• Culture during integration: one culture, take it or leave it
• IRR compression as a sell signal and how Dan acted on it before most saw it coming
• The sell process: engineering a competing bid after buyers locked up the debt market
• The ICG deal: $8.7M in, $250M out, 18 months

Want to apply Dan's framework to your own business? The Intelligence Hub has the Equity Value Creation Operating Model, a step-by-step guide to replacing budget-based management with IRR as your operating compass. Access here.

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This episode is sponsored by DealRoom

M&A Science is heading to ACG DealMax in Las Vegas, April 27–29 and we'd love to see you there. Stop by the booth for a book signing, swag, and a look at what the M&A Science and DealRoom teams have been building.
Learn more and save the date: https://hubs.ly/Q043VnNH0

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Episode Chapters

[00:02:28] Public company vs. private: what changed about deal execution.

[00:03:40] Negotiation tactics: countering lower, manufacturing urgency, the CEO-investor wedge.

[00:08:15] Integration maturity: how execution evolved across 45+ deals.

[00:18:43] Culture: join us or don't.

[00:20:35] Going public: super voting shares, activist investors, and the PR game Dan skipped.

[00:24:40] Post-IPO talent drain and what Dan would restructure in management equity.

[00:29:26] When to sell: reading value compression.

[00:33:03] The sell process: competing bid against a cornered debt market.

[00:39:18] The equity value creation model: replacing budgets with IRR.

[00:43:29] IRR as a real-time operating metric.

[00:49:50] Cruso Ventures, quantum, space, and Boulder Roots Music Fest.

[01:01:06] The ICG deal: $8.7M in, $250M out