Update: GTT announces acquisition of PacketExchange
Global Telecom & Technology (GTT) has announced an agreement to acquire network operator PacketExchange for up to $20 million.
GTT, an international carrier and network integrator, will also pay the assumed debts of the UK-based company.
PacketExchange, through its subsidiaries, owns and operates Ethernet networks for businesses throughout the US, Europe and Asia and is expected to make $20 million in revenue for its current financial year.
GTT said that it expects that the combination of its existing network with the newly acquired business will drive incremental EBITDA.
Eric Swank, CFO at GTT, said: “This is another example of how we can simultaneously build a broader, deeper and more sophisticated customer base while greatly enhancing our positive cash flow through our M&A activities.”
Once the deal is finalised GTT will have access to a customer base of 1,200 clients globally as well as an expanded data services portfolio. GTT said it plans to integrate all network assets, services and clients into its Client Management Database (CMD) as soon as possible to enhance its offerings to customers. GTT said it expects the deal to be finalised by the end of Q2 2011.
“We have actually been in talks with PacketExchange for almost two years. The acquisition matches the business portfolio we are growing and it’s a great fit on three dimensions; its customer base, geographical coverage and products and services are very complimentary,” said Rick Calder, president and CEO of GTT.
GTT has been undergoing detailed integration planning with PacketExchange over the last two months and hopes to complete all integration activities in the third quarter of this year. The move also builds on its 2009 acquisition of WBS Connect, which added over 60 PoPs in Asia, Europe and North America.
“We have been very public about growing GTT both organically as well as through acquisitions. We see this as a key underline in our strategy to grow by acquisition and we have maintained an active following of several other opportunities,” said Calder.