GTT's Calder says 50 M&A targets are in its sights, but rapid integration is key to dealmaking

GTT isn't afraid to come to the acquisition table if a deal will add complementary capabilities to its portfolio, and it currently has a "funnel" of over 50 M&A possibilities, CEO Rick Calder told investors at the Cowen and Company 44th Annual Technology, Media & Telecom Conference.

Calder said that GTT is tracking various opportunities on an ongoing basis.

"We probably have over 50 in the overall funnel, which are folks that we have seen at one stage, or companies that have expressed interest in one state of selling, but they may not be active," Calder said. "We also have an active funnel, which are the companies who intend to sell in the next 6-12 months."

These acquisition targets can range from those that are either smaller like Telnes Broadband, which it recently completed, or others that are half of GTT's size. The service provider has also purchased larger providers such as One Source Networks, which boasted $74.6 million in revenue.

Telnes brought complementary channel partner capabilities, while One Source Networks enhanced GTT's efforts to scale its SIP trunking, managed service capabilities.

"They range in size from Telnes, which was $17 million in revenue, to firms that are about half of our size," Calder said. "Historically, as we have grown, we have looked at bigger firms and have firms in the funnel that are all the way up to $250 million in revenue to firms that are $25 million in revenue or less."

Calder added that "we have a lot that are in that sweet spot of $50-100 million in revenues."

However, in order to make an acquisition work, GTT has a rule that the assets have to be integrated into its fold within two quarters.

"If we can't integrate a business in two quarters, it tells us that it's not strategic," Calder said. "It has to be run on our core platform, which we call our client management database, and integrate organization, people, systems and network in two quarters and we have been able to do with all of our acquisitions."

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