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EXCLUSIVE-Fiber network company Zayo explores IPO -sources

NEW YORK, April 8 (Reuters) - Zayo Group LLC is exploring an initial public offering that could value the fiber network company at close to $7 billion, people familiar with the matter said, amid strong investor appetite for telecommunication firms offering more bandwidth.

An IPO would come as Zayo's peers, including Level 3 Communications Inc, see strong gains in the stock market due to growing demand for ever-faster data transfers. Shares of Level 3 have almost doubled in the last 12 months.

Zayo is contemplating a stock market floatation which could take place as early as the second half of 2014, and has held conversations about this with investment banks, the people said this week, asking not to be named because the matter is private.

The discussions are at an early stage and Zayo's private equity and venture capital backers - which include GTCR LLC, Oak Investment Partners, M/C Partners, Columbia Capital and Charlesbank Capital Partners - have yet to interview underwriters for roles in a public offering, the people added.

Representatives for Zayo, GTCR, Oak Investment Partners, M/C Partners, Columbia Capital and Charlesbank Capital Partners did not immediately respond to requests for comment.

Zayo's regional and metropolitan fiber networks allow its customers, which include telecommunication carriers and companies in various sectors, to transport data, voice, video, and Internet traffic, as well as to interconnect their networks.

Founded in 2006 by former Level 3 executives Dan Caruso and John Scarano, Zayo became a bandwidth infrastructure powerhouse in 2012 through its $2.2 billion acquisition of AboveNet, a provider of fiber optic networks for businesses.

Chicago-based buyout firm GTCR led a $472 million round of new equity financing to support that acquisition.

Zayo now has a network covering seven countries, connecting the largest U.S. and European cities. The network reaches 14,190 buildings, including 622 data centers, according to its website.

The Boulder, Colorado-based company had annualized earnings before interest, tax, depreciation and amortization of $646 million as of December 2013, up from $556 million as of December 2012, according to an earnings supplement published on its website.

(Reporting by Greg Roumeliotis and Soyoung Kim in New York; Editing by Bernard Orr)