GTT Snaps Up Interoute for $2.3B

Ray Le Maistre
News Analysis
Ray Le Maistre, Editor-in-Chief
2/27/2018



GTT has won the battle to acquire cloud-savvy European network operator Interoute with a 1.9 billion (US$2.3 billion) cash deal that is set to close within the next three to six months.

The McLean, Va.-based international operator was not the only one interested in buying Interoute, which erected the "For Sale" sign last year. A number of potential bidders from Asia as well as some private equity firms had shown interest, and in the latter months of 2017 market chat suggested the strongest interest was coming from Asia. (See So Who's Going to Buy Interoute?.)

But GTT has stepped up with what looks like a very savvy move. Interoute, with its strong European fiber backbone and cloud service capabilities, is a good fit for GTT's existing network footprint and operations, and it also adds to its growing European presence following the acquisition of Custom Connect in January. (See GTT Buys Global Connectivity Company.)

And, of course, GTT is not averse to growth through acquisition, having bought Hibernia Networks for $590 million in late 2016, Global Capacity for $161 million in mid-2017 and Perseus for $37.5 million at around the same time. (See GTT Grabs Hibernia Networks for $590M, Diversity & SD-WAN Drive GTT-Global Capacity Deal and GTT Gears for Organic Growth.)

Now, once the deal is complete, GTT will bring on board: a 72,000km European network that covers 24 metro markets and interconnects 126 cities across 29 countries; 15 data centers, 17 virtual data centers and 51 colocation facilities; more than 1,000 enterprise and wholesale operator customers; and annual revenues of more than 710 million ($875 million). (See GTT Agrees to Acquire Interoute.)

It also gets a team that understands and has industrialized cloud services based on what is essentially a regional, networked IT platform that has enabled an efficient development and delivery of SD-WAN services. Such capabilities have been built up, and operationalized, over the past five to seven years and now GTT has the chance to benefit from the experience of the Interoute team.

It's also good for the industry, Light Reading believes, that Interoute is joining forces with another, similar operator and service provider and will not go under the ownership of private equity, a move that wold have not enabled the greatest utilization of what Interoute has built in terms of a network, services and a business.

Ray Le Maistre, Editor-in-Chief, Light Reading

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