GTT to sell infrastructure division to I Squared Capital for $2.15bn

I Squared Capital has agreed to acquire GTT Communications' infrastructure division.

I Squared Capital has agreed to acquire GTT Communications’ infrastructure division. The purchase price is $2.15 billion. Credit Suisse and Goldman Sachs are the financial advisors to GTT on the transaction while Morgan Stanley acted as financial advisor to I Squared Capital.

PRESS RELEASE

MCLEAN, Va., Oct. 16, 2020 — GTT Communications, Inc. (NYSE: GTT), a leading global cloud networking provider to multinational clients, announced today 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.1 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.

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.

“The 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,” commented Ernie Ortega, GTT CRO and interim CEO. “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.”

Gautam Bhandari, managing partner at I Squared Capital stated, “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.”

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

· 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.

· Fourteen Tier 3 data centers and over 100 colocation facilities.

· Offering a full suite of telecom and data infrastructure solutions to marquee clients.

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.
Credit Suisse and Goldman Sachs are the financial advisors and Goodwin Proctor LLP is acting as legal advisor to GTT on this transaction. Morgan Stanley acted as financial advisor and Rothschild as debt advisor to I Squared Capital, with Solon acting as commercial and technical advisor, KPMG as tax and accounting advisor, Linklaters as legal advisor and Latham & Watkins as borrower’s counsel.

1 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.

About GTT
GTT connects people across organizations, around the world and to every application in the cloud. Our clients benefit from an outstanding service experience built on our core values of simplicity, speed and agility. GTT owns and operates a global Tier 1 internet network and provides a comprehensive suite of cloud networking services. For more information on GTT (NYSE: GTT), please visit www.gtt.net.

About I Squared Capital
I Squared Capital is an independent global infrastructure investment management firm focusing on energy, utilities, digital infrastructure, transport and social infrastructure in the Americas, Europe and Asia. The firm has offices in Hong Kong, London, Miami, New Delhi, New York and Singapore.