Telecommunications provider GTT Communications said on Friday it would sell its infrastructure unit to I Squared Capital in a $2.15 billion deal that would boost the private equity firm’s plan to create a global fibre-optic network.
The unit’s network, which transmits data through light and powers high-speed internet, spans over 103 cities in Europe and North America with three transatlantic subsea cables. The network opens new markets to I Squared Capital as demand for telecommuting, remote classes and other virtual activities grows during the coronavirus pandemic.
GTT shares jumped as much as 36% on the news but pared gains to 10% shortly after midday. GTT said it would use proceeds to pay down the $3.2 billion in long-term debt built up after an acquisition spree over the last decade.GTT had been exploring the sale since last year, which it expected to deliver $370 million to $390 million in revenue with comparable earnings before interest, taxes, depreciation and amortization (EBITDA) of $160 million to $180 million.
In 2017, I Squared Capital bought Hutchison Global Communications, the Hong Kong-based fibre optic company for HK$14.5 billion ($1.9 billion).
“This is part of our digital strategy where we are effectively taking network assets fibre network assets in Asia, Europe and the U.S., with the intention of growing them,” said Bhandari.
Source: Reuters.com