GTT Communications, Inc. has announced a definitive agreement to acquire Global Capacity, a provider of network connectivity solutions that simplifies the process of connecting enterprises to high-value cloud and business destinations.
This strategic combination:
- Grows 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
- Augments GTT’s Managed SD-WAN service with diverse access options, including an extensive on-net Ethernet over Copper infrastructure
- Expands scale and network reach with last mile connectivity to over 9.6 million U.S. commercial addresses, from 41 data centers and 1,750 Central Office points of presence
“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.”
“This transaction further advances the breadth, depth and ease of deploying connectivity services for our customers,” commented Jack Lodge, president of Global Capacity. “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.”
“With this agreement, we are combining two highly complementary organizations with closely aligned core values and operating strategies,” stated F. Francis Najafi, founder and CEO of Pivotal Group, owner of Global Capacity. “This combination creates one of the most innovative global cloud networking companies in the industry.”
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 expects that Global Capacity’s annualized revenue will be 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, with integration and cost synergies to be achieved within two to three quarters after close. The parties expect to close the transaction by the end of third quarter 2017, subject to certain regulatory approvals and other customary closing conditions. GTT will fund the cash portion of the consideration at close with funds from the debt offering completed in May.
Perella Weinberg Partners LP served as the exclusive financial advisor to Global Capacity in connection with this transaction.