GTT To Acquire WBS Connect
Global Telecom & Technology Inc. (GTT) (GTLT), a global network integrator based in McLean, Va., announced Tuesday it has signed a definitive agreement to acquire privately held WBS Connect LLC, a Denver-based provider of high bandwidth IP and WAN services.
GTT CFO Eric Swank said the acquisition puts GTT on a path to $100 million in revenue. WBS Connect has approximately $28 million in revenue and positive EBITDA. GTT reported nearly $67 million in revenue for the year ending Dec. 31, 2008.
Under the terms of the agreement, the total consideration consists of 500,870 shares of GTT common stock to be issued over 18 months beginning six months after the transaction closes, $1.8 million in cash and seller notes, plus the assumption of WBS liabilities and working capital. Subject to customary closing conditions and FCC approval, GTT expects the transaction to close by the end of 2009.
Swank said the company will finance the acquisition with existing cash, available debt capacity, and a “very modest” share issuance.
GTT provides service to more than 300 enterprise, government and carrier clients in more than 80 countries. WBS Connect adds more than 400 customers. In addition, the acquisition will expand GTT’s portfolio of IP transit and Ethernet services as well as add more than 60 PoPs in major North American, Asian and European metro centers. WBS Connect has a presence in more than 85 global data centers, access to more than 300,000 lit buildings.
“By layering WBS Connect’s services onto our operational platform, we will be able to realize sizeable economies of scale. Over time, we will also seek ways to leverage the WBS Connect network to expand our overall gross margins,” Swank said.
