GTT Grabs Interoute to Gain 72000km European Fibre Optic Network

The operator of one of Europe’s largest independent fibre and cloud networks, Interoute, has been acquired by GTT for a whopping $2.3bn (£1.65bn) via a mix of debt and equity. The move will enable GTT to expand their Tier 1 global IP network via the acquisition’s huge 72,000km fibre optic reach.

The purchase price will be paid in cash at closing. GTT received committed debt financing for the transaction from a group of financial institutions and committed equity financing of $250m from their largest institutional investor, The Spruce House Partnership, and Acacia Partners.

Interoute recently reported revenues of €718m and Adjusted EBITDA of €165m for the 12 months to 30th September 2017.

Rick Calder, GTT president and CEO, said:

“The acquisition of Interoute represents a major milestone in delivering on our purpose of connecting people, across organisations 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.”

Gareth Williams, Interoute CEO, said:

“This is an exciting next chapter for Interoute, GTT, our customers and our team. The combined assets and strengths of our two companies create a powerful portfolio of high-capacity, low-latency connectivity, and innovative cloud and edge infrastructure services to support our customers in the global digital economy.”

The acquired network includes over 400 points of presence, spanning 24 metro areas and interconnecting 126 cities across 29 countries. GTT expects the transaction to close in 3-6 months, subject to regulatory approvals. A number of broadband ISPs in the UK also make use of Interoute’s network.