The US cloud networking company GTT Communications has announced that it will purchase Interoute in all-cash deal for $2.3bn to expand its European operations.
Interroute currently operates one of the largest independent fibre networks in the region and the deal will allow it to expand its network to interconnect 136 cities across 29 countries. While GTT will be able to boost its cloud connectivity platform by adding 15 data centres and 17 virtual data centres as well as 51 collocation facilities.
The US-based company has a market value of around $2.9 billion and received committed debt financing from financial firms and committed equity financing of $250 million from The Spruce House Partnership and Acacia Partners.
Interoute, whose headquarters is located in London, reported a revenue of $884.4m over the last twelve months ending on September 30th, 2017.
GTT's President and CEO, Rick Calder emphasised the importance of the acquisition in a press release, saying:
“The acquisition of Interoute represents a major milestone in delivering on our purpose of connecting people, across organizations and around the world. This combination creates a disruptive market leader with substantial scale, unique network assets and award-winning product capabilities to fulfill our clients’ growing demand for distributed cloud networking in Europe, the U.S. and across the globe. Following our successful, proven acquisition model, we expect to complete this integration within three to four quarters post-close and achieve a post-synergy multiple of seven to eight times Adjusted EBITDA or better on a pro forma basis.”
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