14 Apr A Major Deal Announced Between GTT and MegaPath
Global Telecom & Technology (GTT) is a multinational telecom giant as well as an Internet Service Provider. They are headquartered in McLean, Virginia. They have offices in all of the major cities, primarily in the United States and Europe. They also have a foothold in the Asian market, with an office based in Hong Kong. The company operates a Tier 1 network and also provides IP Transit and Multiprotocol Label Switching (MPLS) services to its customer base.
Just this week, GTT announced that it has reached an acquisition deal with MegaPath’s Managed Service business. MegaPath is also a leading cloud communications company, with services in telecom, Voice over Internet Protocol, Unified Communications, Hosted IT, as well as Secure Data Networking. Under the terms of the deal, GTT will purchase this business unit from MegaPath at a value of $144.8 Million in cash; and $7.5 Million in MegaPath common stock.
With this deal, GTT will acquire at least 500 brand new customers, from which it can quickly cross sell its other telecom and IT based services. In turn, these new customers will gain access to GTT’s much broader global footprint, which includes a market of 56 major metropolitan areas in the United States, and over 300 markets worldwide.
The Managed Service business at MegaPath has always been profitable. For example, it has generated nearly $124 Million on a recurring revenue basis, with adjusted Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $20 Million. After receiving approval from regulatory agencies, it is expected this deal will close on April 1, 2015.
According to Craig Young, Executive Chairman of MegaPath, “This agreement with GTT is the second of two strategic initiatives that further our strategy of becoming a leading global cloud communications provider. This agreement will provide us with additional resources to drive further innovation in our unified communications and cloud offerings and leverage our existing leadership on the communications and security front to build a dominant cloud business.” (SOURCE: http://www.fiercetelecom.com/story/gtt-acquires-megapaths-managed-services-business-enhances-multinational-cus/2015-02-20).
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