|MCLEAN, Va., Feb. 26, 2018
GTT to Acquire Interoute
Adds 72,000 km fiber network in Europe
Deepens cloud networking service platform
|GTT Communications , Inc. (NYSE: GTT), the leading global cloud networking provider to multinational clients, announced today a definitive purchase agreement to acquire Interoute, operator of one of Europe’s largest independent fiber networks and cloud networking platforms, for approximately €1.9 billion ($2.3 billion) in cash.
The strategic combination:
· Significantly augments scale, expanding GTT’s Tier 1 global IP network with one of Europe’s most extensive fiber footprints. The network includes over 400 points of presence, spanning 24 metro areas and interconnecting 126 cities across 29 countries.
· Strengthens GTT’s leadership position in software-defined wide area networking (SD-WAN) with expanded capabilities.
· Adds 15 data centers, 17 virtual data centers and 51 colocation facilities, enhancing GTT’s cloud connectivity platform.
· Contributes infrastructure, edge and hosted services to GTT’s suite of cloud networking services.
· Expands and complements GTT’s multinational client base, adding over 1,000 strategic enterprise and carrier clients, primarily headquartered in Europe.
· Enhances GTT’s global team with a world-class sales, operations and customer service organization.
“The acquisition of Interoute represents a major milestone in delivering on our purpose of connecting people, across organizations 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.”
“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.”
Interoute has received the strong support of its shareholders — the Sandoz Family Foundation, Aleph Capital and Crestview Partners — in its strategy of building and consolidating the European fiber, cloud and connectivity markets to create a player with significant scale and international presence.
Goodwin Procter LLP served as GTT’s legal advisers on this transaction.
Interoute Financial Information
Conference Call Information
A telephonic replay of the conference call will be available for one week and may be accessed by calling +1.877.344.7529 or +1.412.317.0088 and using the passcode 10112898. The webcast will be archived in the investor relations section of GTT’s website .
Non-GAAP Financial Information
Adjusted EBITDA is defined as net income/(loss) before interest, income taxes, depreciation and amortization (“EBITDA”) adjusted to exclude severance, restructuring and other exit costs, acquisition-related transaction and integration costs, losses on extinguishment of debt, stock-based compensation and from time to time, other noncash or nonrecurring items.
We use Adjusted EBITDA to evaluate operating performance, and this financial measure is among the primary measures we use for planning and forecasting future periods. We further believe that the presentation of Adjusted EBITDA is relevant and useful for investors because it allows investors to view results in a manner similar to the method used by management and makes it easier to compare our results with the results of other companies that have different financing and capital structures.