GTT is on the buying path again, announcing that it has acquired Internet and managed services provider Telnes Broadband for $18 million.
By acquiring Telnes Broadband, GTT will be able to accelerate its channel capabilities with the addition of what it says is a "strong indirect sales channel with a growing revenue base."
Having this indirect sales channel will enable GTT to extend its suite of global Internet, EtherCloud wide area networks, managed services and voice services across a wider set of vertical markets.
The deal also has direct benefits for Telnes. GTT will make it possible for Telnes to expand services and capabilities for its current clients and channel partners.
Specifically, Telnes' agents will gain an immediate expanded international reach, services and enhanced customer support to differentiate themselves from their competitors.
Under the terms of the agreement, the $18 million deal consists of about $15 million in cash and $3 million in GTT common stock, with approximately $2 million of the cash consideration held back for one year to cover undisclosed liabilities or other indemnification claims per the purchase agreement.
GTT funded the cash portion of the deal by drawing funds from its $50 million revolving line of credit facility.
Rick Calder, CEO of GTT, said in a release that the company expects "to complete integration within two quarters and achieve a post-synergy purchase price multiple of less than five times Adjusted EBITDA."
Growing through acquisitions has been a key priority for GTT, with an eye on assets that expand their network reach and service capabilities.
Telnes is the third acquisition GTT has made in less than a year, having previously bought One Source Networks last September and MegaPath's Managed Services business -- acquisitions that bring something different to GTT's table.
By acquiring One Source Networks, GTT enhanced its data, SIP trunking and managed service portfolio to serve more Fortune 1000 business customers. Earlier, its acquisition of MegaPath's Managed Services business, one that currently serves more than 500 large multinational business customers, deepened GTT's multisite customer base.
- see the release
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