GTT Communications is acquiring cloud networking provider Interoute.
Interoute, which reported revenues of of €718 million and Adjusted EBITDA of €165 million for the 12 months ending September 30, 2017, is being acquired for approximately €1.9 billion ($2.3 billion) in cash.
The reasoning behind the deal is quite clear, it’ll significantly increase the scale of GTT’s Tier 1 global IP network, which includes a presence across 29 countries and adds a 72,000 km fiber network in Europe.
To the GTT portfolio will be added 15 data centres, 17 virtual data centres, and 51 collocation facilities.
On the client front there will be another 1,000 “strategic enterprise” and carrier clients added to the company’s portfolio.
“The acquisition of Interoute represents a major milestone in delivering on our purpose of connecting people, across organisations and around the world,” said Rick Calder, GTT president and CEO.
“This combination creates a disruptive market leader with substantial scale, unique network assets and award-winning product capabilities to fulfill our clients’ growing demand for distributed cloud networking in Europe, the U.S. and across the globe. Following our successful, proven acquisition model, we expect to complete this integration within three to four quarters post-close and achieve a post-synergy multiple of seven to eight times Adjusted EBITDA or better on a pro forma basis.”
The acquisition will be paid in cash at closing, with GTT receiving committed debt financing for the transaction from a group of financial institutions.
“This is an exciting next chapter for Interoute, GTT, our customers and our team,” said Gareth Williams, Interoute CEO. “The combined assets and strengths of our two companies create a powerful portfolio of high-capacity, low-latency connectivity, and innovative cloud and edge infrastructure services to support our customers in the global digital economy.”