GTT Communications, Inc. (NYSE:GTT) has agreed to acquire fellow network connectivity supplier Global Capacity from owner Pivotal Group for $100 million in cash and 1.85 million shares of GTT common stock. The acquisition is the third GTT has made since last November.
Global Capacity serves the cloud connectivity needs of U.S. enterprise customers via its One Marketplace software-defined fiber network backbone (see "Global Capacity deploys Ciena 8700 Packetwave Platform for 100 Gigabit Ethernet" and "Global Capacity adds San Francisco fiber ring"). GTT says the acquisition will add high-profile clients in the healthcare, application service provider, retail, and carrier markets to its existing customer roster. The deal also will boost GTT's software-defined WAN (SD-WAN) operations as well as expand its overall footprint with last-mile connectivity to more than 9.6 million U.S. commercial addresses, from 41 data centers and 1,750 central office points of presence.
GTT expects that Global Capacity will bring in annualized revenue of approximately $200 million at close, net of pro forma adjustments, and that the purchase price will reflect a multiple of post-synergy adjusted EBITDA of 5.0x or lower. GTT expects to achieve integration and cost synergies within two to three quarters after close, a milestone the company expects to achieve by the end of third quarter 2017. GTT will fund the cash portion of the deal with funds from the debt offering completed in May.
"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 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. After integration, we expect to achieve our previously announced, next financial objectives of $1 billion in revenue and $250 million in adjusted EBITDA."
Announcement of the planned acquisition of Global Capacity comes shortly after GTT announced an agreement to acquire Perseus (see "GTT Communications buys network connectivity provider Perseus"). The company also announced a deal to buy Hibernia Networks last November (see "GTT to buy Hibernia Networks for $590 million").
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