GTT Communications has entered into a definitive purchase agreement to acquire the UK-based operator of one of Europe’s largest independent fibre networks and cloud networking platforms, Interoute, in a deal worth approximately €1.9 billion ($2.3 billion).
The move further expands GTT’s tier 1 global IP network following its acquisition of Dutch carrier, Custom Connect in January of this year (see GTT acquires Dutch carrier Custom Connect). It gains 72,000km of fibre optic in Europe, alongside more than 400 points of presence, across 126 cities in 29 countries. GTT also adds 15 data centres, 17 virtual data centres and 51 colocation facilities to its cloud platform. As part of the objective to make GTT a ‘disruptive market leader’ the acquisition expands its multinational client base, adding more than 1,000 strategic enterprise and carrier clients, primarily headquartered in Europe.
GTT received committed debt financing for from a group of institutions and committed equity financing of $250 million from its largest institutional investor, The Spruce House Partnership, as well as Acacia Partners. The company expects the transaction to close in three to six months, subject to regulatory approvals. Interoute has also 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 fibre, cloud and connectivity markets to create a player with significant scale and international presence.
‘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, in a statement. ‘This combination creates a disruptive market leader with substantial scale, unique network assets and award-winning product capabilities to fulfil our clients’ growing demand for distributed cloud networking in Europe, the U.S. and across the globe.’
Speaking on a conference call to discuss the transaction, alongside the company’s fourth quarter financial results, Calder also stated that Interoute’s status as essentially ‘a European version of GTT’ will allow it to be successfully and quickly integrated, with the expectation that this would take three to four quarters. He also spoke of the ‘tremendous respect’ GTT holds for Interoute and the business it has built, saying: ‘we think the value of that business will be enhanced significantly in collaboration with GTT.’ Calder closed by expressing his eagerness to build on the success Interoute has built and welcome its staff and customers to GTT.
Also commenting on the transaction, Gareth Williams, Interoute CEO said: ‘This is an exciting next chapter for Interoute, GTT, our customers and our team. 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.’