Global Telecom & Technology, Inc has announced an agreement to buy certain customers and assets from Chicago-based Global Capacity, Inc. Under the agreement, GTT will buy contracts serving over 100 data transport customers and generating up to $25 million in annualized revenue for up to $8 million in cash. GTT expects the transaction to close in the first quarter of 2010, pending approval from customers, suppliers and the Federal Communications Commission.
Rick Calder, President and Chief Executive Officer of Global Telecom & Technology, said of the acquisition “Following on the heels of the acquisition of WBS Connect, the addition of Global Capacity’s customer base advances GTT’s strategy to rapidly scale our global telecom business. With this transaction, we will further leverage our unique intellectual capital and enhance our established reputation for providing reliable telecom services to our global customer base.”
Eric Swank, Chief Financial Officer of GTT, said “This is another significant step forward in building cash flow through prudent M&A activity.” He added, “this acquisition provides a great opportunity to leverage our CMD platform, by essentially porting the new circuits into our business, expanding our adjusted EBITDA in the process by layering on contract revenue from a very similar customer base. Due to these synergies, we expect the transaction to be immediately accretive.”
This is the second acquisition in less than 60 days for GTT. The company closed its purchase of WBS Connect on December 16, 2009. The WBS Connect acquisition provides GTT the opportunity to expand its portfolio of IP transit and Ethernet services, and adds over 60 points of presence in major metro markets throughout North America, Asia and Europe.