GTT Communications to sell infrastructure division for $2.15B

McLean-based telecommunications company GTT Communications Inc., which provides high-speed internet and cloud networking services to more than 144 countries, announced Friday it will sell its infrastructure division to Miami, Florida-based I Squared Capital for $2.15 billion.

Under the definitive purchase agreement, I Squared Capital would obtain GTT’s Pan-European, North American, subsea and transatlantic fiber network and data infrastructure service business. The acquisition will specifically include three transatlantic subsea cables, a 103,000-route kilometer fiber network, 14 Tier 3 data centers and more than 100 colocation facilities. 

“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,” GTT interim CEO and Chief Revenue Officer Ernie Ortega said in a statement. “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.” Ortega took over in early June when Richard D. Calder, who had been president and CEO since 2007, left the company. 

Founded in 1998, GTT specializes in Tier 1 internet network and cloud networking services. The company reported revenues of more than $1.72 billion in 2019.

“Now more than ever, digital infrastructure is an essential asset class as societies across the globe rely heavily on high-speed digital bandwidth,” Gautam Bhandari, managing partner at I Squared Capital, said in a statement. “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.”

With all required regulatory approvals, the acquisition is expected to close during the first half of 2021, according to GTT Communications.

Credit Suisse and Goldman Sachs are the financial advisers and Goodwin Proctor LLP is serving as legal adviser to GTT Communications during the transaction. Morgan Stanley acted as financial adviser and Rothschild as debt adviser to I Squared Capital. Solon served as commercial and technical adviser and KPMG served as tax and accounting adviser. Linklaters served as legal adviser and Latham & Watkins served as borrower’s counsel.

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