McLean, VA, February 8, 2016 — GTT Communications, Inc. (NYSE: GTT), the leading global cloud networking provider to multinational clients, announced today the acquisition of Telnes Broadband, an internet and managed services provider.
This combination of assets will:
Telnes was founded in 2003 and is based in Everett, Washington. The company provides high-availability managed network services and cloud communications. Telnes has delivered strong year-over-year revenue growth with an expanding client base, driven through a growing channel partner program. For 2015, Telnes reported revenue of approximately $17 million and Adjusted EBITDA of approximately $1 million.
“This acquisition will bring significant benefits to our clients and our company,” said Rick Calder, GTT president and CEO. “Existing clients will have access to a broader suite of global internet, EtherCloud® wide area networks, managed services and voice services. GTT will bolster organic growth through the addition of a strong indirect sales channel with a growing revenue base. Consistent with our long-standing track record, we expect to complete integration within two quarters and achieve a post-synergy purchase price multiple of less than five times Adjusted EBITDA.”
GTT paid $18 million for the acquisition, composed of approximately $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 consideration by drawing funds from its $50 million revolving line of credit facility.
“This transaction allows us to deliver upon our growth strategy and invest more resources into the channel,” stated Jason Ness, founder and CEO, Telnes Broadband. “GTT will provide our agents with expanded international reach, industry-leading services and enhanced customer support to differentiate themselves within the market.”
Q Advisors LLC, a leading boutique investment bank focused on the global telecom, media, and technology (TMT) sectors, acted as exclusive financial advisor to Telnes Broadband.
GTT’s global Tier 1 IP network enables clients to connect to any location in the world and with any application in the cloud. Our cloud networking services provide a better way for multinational clients to reach the cloud. Clients trust us to deliver secure solutions with simplicity, speed and agility. For more information, visit www.gtt.net.