GTT Sells Infrastructure Division to I Squared Capital for $2.15 Billion

GTT Communications, Inc. (GTT) has announced that the company has signed a definitive purchase agreement to sell its infrastructure division to I Squared Capital, an independent global infrastructure investment firm, for $2.15 billion. The infrastructure division consists of GTT’s business and activities of providing Pan-European, North American, sub-sea and trans-Atlantic fiber network and data center infrastructure services to customers. 

The total consideration includes an upfront cash payment of $2.02 billion at closing and total deferred payments of up to $130 million based on certain financial results. The acquisition is expected to close, subject to satisfying all required regulatory approvals and contingencies included in the agreement, during the first half of 2021.

GTT infrastructure assets for sales

GTT infrastructure division sale consists of selected network and data center assets accumulated from several GTT acquisitions, including Interoute, Hibernia, and KPN International, that comprises:

• A 103,000 route kilometer fiber network with over 400 points of presence, spanning 31 metro areas and interconnecting 103 cities across Europe and North America.
• Three transatlantic subsea cables, including GTT Express, the lowest latency route between Europe and North America, GTT Atlantic North and  South cables.
• Fourteen Tier 3 data centers and over 100 colocation facilities.
• Offering a full suite of telecom and data infrastructure solutions to marquee clients.

GTT Tier 1 IP network and major acquisitions

GTT provides a comprehensive portfolio of cloud networking services over its global Tier 1 IP network that includes traditional and software-defined wide area networking, global SIP trunking, advanced solutions, security and internet services.

GTT Communications, Inc.(GTT), formerly known as Global Telecom & Technology, was officially changing its name to GTT GTT Communications, Inc. on January 14, 2014. Previously, GTT had acquired Chicago-based privately held global IP backbone company nLayer Communications (AS4436) for $18 million in May 2012, and acquired from Inteliquent the Tier 1 IP network Tinet AS3257 (formerly Tiscali International Network) for $54.5 million in April 2013. Then GTT merged and consolidated two leading IP networks, i.e., nLayer AS4436 and Tinet AS3257, into GTT AS3257, building and enhancing its Tier 1 IP network position in the world.

In January 2017, GTT completed the acquisition of Hibernia Networks, including Hibernia Express and Hibernia Atlantic submarine cable systems and other assets, for USD607 million (initial price was $590 million). In May 2018, GTT completed the acquisition of Interoute for $2.3 billion. In December 2019, GTT completed the acquistion of Dutch KPN International for $56 million (€50 million). These acquisitions have built up GTT's major backbone infrastructure assets in Europe and tranatlantic international submarine cables. 

The sales and divestment of the highly differentiated infrastructure division assets will ensure greater focus on network investment and development of high-speed infrastructure services under the more specialized ownership of this experienced investor. 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. 

The buyer: I Squared Capital

I Squared Capital, based in the United States, is a private equity firm focusing on global infrastructure investments.

Now more than ever, digital infrastructure is an essential asset class as societies across the globe rely heavily on high-speed digital bandwidth. 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.

I Squared Capital acquired Hutchison Global Communications Ltd. (HGC) from Hutchison Telecommunications Hong Kong Holdings Ltd. for HK$14.5 billion ($1.9 billion) in October 2017. HGC provides telecom, data center and broadband services to consumers and corporate customers in Hong Kong. It also operates an international network with routes into mainland China and connections to other global providers.

After the acquisition of HGC and GTT, I Squared Capital has built up its digital infrastructure with global coverage, where GTT's asset covering Europe, Americas and tran-Atlantic, HGC's strength in Asia, EMEA, Africa. 

It can be forecast, I Squared Capital might be seeking digital infrastructure assets across the Pacific to enhancing its global coverage.