GTT adds Global Capacity in $161m purchase deal
26 June 2017 | Alan Burkitt-Gray
GTT is to buy Global Capacity for the equivalent of $161 million, of which $100 million is in cash.
The acquisitive company, which has only just absorbed Hibernia Networks and which last week announced its $37.5 million purchase of Perseus, said the Global Capacity would give it a client base and network access in the US.
“The acquisition of Global Capacity accelerates GTT’s growth strategy and underscores our commitment to connecting people across organizations and around the world,” said Rick Calder, GTT president and CEO.
GTT is buying the operation from Pivotal Group, a real estate investment company.
“With this agreement, we are combining two highly complementary organisations with closely aligned core values and operating strategies,” said Francis Najafi, founder and CEO of Pivotal. “This combination creates one of the most innovative global cloud networking companies in the industry.”
GTT said the deal would grow GTT’s client base, with the addition of marquee clients in the healthcare, application service provider, retail and carrier markets, adding highly complementary recurring revenue streams.
It would augment GTT’s managed SD-WAN service with diverse access options, including an extensive on-net Ethernet over copper infrastructure.
And it would expand the scale and network reach with last-mile connectivity to over 9.6 million US commercial addresses, from 41 data centres and 1,750 central office points of presence.
“GTT gains new marquee clients, enhanced network reach and scale, and a great team of employees to drive outstanding client experience, through our core values of simplicity, speed and agility,” said Calder. “After integration, we expect to achieve our previously announced, next financial objectives of $1 billion in revenue and $250 million in adjusted EBITDA.”
Jack Lodge, president of Global Capacity, hailed the deal: “GTT’s global network reach and extensive portfolio of managed services are a compelling complement to our connectivity platform, resulting in substantial benefits for our carrier and enterprise customers. Together, we anticipate growth and success for our customers, employees, and partners.”
The purchase price consists of $100 million in cash and 1.85 million shares of GTT common stock, to be issued to the sellers at closing. GTT’s shares were trading today at $33.10 each, valuing the share component of the offer worth $61.23 million.
GTT said it expects that Global Capacity’s annualised revenue will be approximately $200 million at close, net of pro forma adjustments.
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