GTT has taken another bite out of the European and global cloud-and-fiber services markets, announcing a deal to acquire Interoute for $2.3 billion in cash.
Like other deals GTT has made like its recent purchase of Custom Connect, the Interoute acquisition is about scale.
By acquiring Interoute, GTT expands its Tier 1 global IP network with a 72,000-km fiber network in Europe as well as over 400 points of presence, spanning 24 metro areas and interconnecting 126 cities across 29 countries.
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GTT also enhances its cloud connectivity platform with 15 additional data centers, 17 virtual data centers and 51 colocation facilities in Europe alone. Interoute also has established connections to over 195 additional third-party data centers across Europe.
But network expansion is just one element Interoute brings to GTT.
The service provider increases its multinational customer base, adding over 1,000 strategic enterprise and carrier clients, primarily headquartered in Europe. It also enhances GTT’s global team with a larger sales, operations and customer service organization.
GTT said that the purchase price will be paid in cash at closing. The company 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.
After meeting customary regulatory approvals, GTT expects the transaction to close in three to six months.
Interoute—which, like GTT has expanded its margins and overall growth through a combination of its own network builds and acquisitions of other providers—reported that for the 12 months ending Sept. 30, 2017, revenues of $884 million and Adjusted EBITDA of $203 million.
This is the second acquisition GTT made this year following its deal to acquire Custom Connect, which extended its European and Middle East IP-based backbone.