GTT Communications announced 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.
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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.
The purchase price will be paid in cash at closing. GTT received committed debt financing for the transaction from a group of financial institutions and committed equity financing of $250 million from GTT’s largest institutional investor, The Spruce House Partnership, and Acacia Partners.
GTT expects the transaction to close in three to six months, subject to customary regulatory approvals. At closing, after funding the acquisition with a combination of debt and equity, the expected ratio of total net debt to Adjusted EBITDA will be approximately 5.0-5.5:1, using pro forma combined Adjusted EBITDA plus expected cost synergies.
After closing, over time, GTT expects to reduce the ratio of total net debt to Adjusted EBITDA to its long-term target range of 3.0-4.0:1.
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. ■