Infrastructure-focused private equity firm I Squared Capital has reached an agreement to purchase the infrastructure division of GTT Communications, a provider of cloud networking services.
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Under the terms of the transaction, the buyer will pay up to USD 2.15 billion for the business.
Of this amount, USD 2.02 billion will be in the form of an upfront cash payment, while an additional earn-out component of as much as USD 130.00 million could also be due at a later date, subject to certain unspecified financial targets being met.
Completion is expected to follow in the first half of 2021, subject to the green light from regulators.
The business being acquired as part of the deal is active in the provision of pan-European, North American, sub-sea and transatlantic fibre network and data centre infrastructure services and includes assets purchased through the acquisitions of Interoute, Hibernia and KPN International.
It includes a 130,000 route kilometre fibre network interconnecting 103 cities across Europe and North America, three transatlantic subsea cables, 14 tier three data centres and more than 100 colocation facilities.
GTT ‘s interim chief executive, Ernie Ortega, said the move will better serve the target as its new owner will be able to concentrate on its network investment and high-speed infrastructure services.
He added: “The deal enables GTT to reinforce its capex light business model as well as its cloud networking focus and will benefit both enterprise and infrastructure clients alike.”
Gautam Bhandari, managing partner at I Squared, added: “This acquisition builds upon I Squared Capital’s overarching global digital infrastructure strategy and experience with complex carve-outs to expand the reach of our platforms across Asia, Europe and North America.”
GTT was active as an acquiror last year; in July 2019, it agreed to pick up KPN Eurorings, the international division of Koninklijke KPN, for EUR 50.00 million on a debt- and cash-free basis.
© Zephus Ltd