GTT, a virtual network operator, has enhanced its Ethernet and IP transit capabilities by purchasing Inteliquent's global data services business for $54 million, a move that immediately bolsters its Ethernet interconnectivity capabilities.
Besides the purchase price for the company, GTT will also provide $2 million in commercial services over the next three years.
The Inteliquent business has been profitable, generating revenues of $69.5 million in 2012 and serving over 1,100 customers. These customers are served by 120 points of presence in 24 countries, which provide IP Transit and Ethernet services to other service providers.
This sale provides benefits to both companies.
Formerly known as Neutral Tandem, Inteliquent got its start selling voice transit solutions to provide network connectivity to the ILECs for local calls and switched access services, which connect long distance calls. By selling off the data service unit to GTT, one that it acquired from Tinet S.p.A. in 2010, Ed Evans, CEO of Inteliquent said the company will be able to continue "grow our core voice services business."
Over the past year, Inteliquent has been through a number of changes. Last October, Surendra Saboo, the company's president and chief operating officer, one of the chief architects behind the Tinet deal, and CFO Robert M. Junkroski both left the company.
Although no reason was cited for their departures, Clinton Group, Inc.--the investment manager to several partnerships that collectively own more than 1.6 million shares of Inteliquent--wrote in a letter to James P. Hynes, chairman of Inteliquent that the service provider spent too much to acquire Tinet in 2010.
While the Tinet business may have not been a good fit for Inteliquent, it could work well with GTT's business model. GTT has been expanding its Ethernet and cloud-based service sets to cloud network provider to enterprise, government and carrier customers in over 80 countries.
With the Inteliquent data business, GTT will be able to expand its IP transit and Ethernet base further. One of the key Ethernet services it gains is EtherCloud, a Layer 2 wholesale platform that enables its network partners to buy and sell global Ethernet and VPLS connectivity.
Richard D. Calder Jr., president and CEO of GTT, said in the release that "Acquiring the Inteliquent data business accelerates our established growth curve towards becoming a more asset-based network solution provider."
For more:
- see the release
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