GTT Grabs Hibernia Networks for $590M

GTT Communications, a company built through acquisition, today announced one of its biggest to date, the $590 million acquisition of Hibernia Networks, a global network operator known for its subsea fiber assets including Hibernia Express, its low latency trans-Atlantic cable system.

The deal is just the latest in a fall of M&A activity. It is expected to close in the second quarter of 2017, consists of $515 million in cash and 3.3 million shares of GTT common stock worth $75 million. GTT Communications Inc. acquired seven service providers on the way to building a top five global ISP network, and Hibernia Networks represents the biggest fish it's landed to date, as the company seeks to compete for multinational cloud connection business. (See GTT Applauds AT&T's New Distraction and GTT Ready to Bust Out.)

Hibernia operates fiber optic networks in 100 markets and 25 companies globally, mostly in the US, EMEA and landing sites in Asia-Pacific. It also operates its own video transport network and Hibernia Express, a 53 Tbit/s low latency transatlantic cable network launched a little over a year ago. (See All Aboard: Hibernia Express Cable Completed and Hibernia Offers Protected Wavelengths on Undersea Routes.)

"This clearly adds incredible breadth and depth to our existing global Tier 1 IP network," GTT CEO Rick Calder tells Light Reading in an interview. He contrasts GTT's acquisition with other recent M&A activity in the telecom space: "In this case both companies are growing, which is very different from other recent acquisitions," he says.

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Adding Hibernia's video transport network to the mix is particularly interesting at a time when video represents such a significant segment of IP traffic, Calder notes. "We have an interesting set of media and entertainment clients already and this is a chance to grow that base," he says.

According to the GTT announcement, the company expects to achieve "a post-synergy multiple of seven times Adjusted EBITDA or better on a pro forma basis."

— Carol Wilson, Editor-at-Large, Light Reading