GTT's $2.3 Billion Interoute Buy to Boost SD-WAN, Channel Program

**Editor’s Note: Please click here for a recap of the biggest channel-impacting merger and acquisition news from January.**

GTT Communications is bolstering its fiber, data-center and SD-WAN capabilities with the acquisition of Interoute.

Virginia-based GTT said Monday that it will buy Interoute for approximately $2.3 billion. Interoute is a U.K.-based company known for its fiber network and cloud-networking solutions, with 400 points of presence and interconnection with 129 cities. GTT executives say the purchase will continue the company’s international expansion and add 1,000 mostly European enterprise and carrier customers.

It’s the first acquisition outside of the U.S. for GTT since it announced plans to buy Hibernia Networks in 2016.

CEO Rick Calder says the agreement is a big step for his company as it attempts to spread across the world.

“This combination creates a disruptive market leader with substantial scale, unique network assets and award-winning product capabilities to fulfill our clients’ growing demand for distributed cloud networking in Europe, the U.S. and across the globe,” Calder said. “Following our successful, proven acquisition model, we expect to complete this integration within three to four quarters post-close and achieve a post-synergy multiple of seven to eight times adjusted EBITDA or better on a pro-forma basis.”

GTT’s Gina Nomellini

GTT chief marketing officer Gina Nomellini tells Channel Partners that Interoute brings increased scale and coverage. One of the key benefits is that GTT’s network will gain “density and capillarity and reach,” but the company will also be better equipped to serve customers on the ground level.

“We have very significant presence within the market, and we’re capitalizing on a very well-established, world-class sales, customer service and operations team,” Nomellini said.

Interoute has 15 data centers and 51 colocation facilities that GTT will access to increase its cloud connectivity, and the buyer claims that Interoute’s SD-WAN chops are one of the deal’s biggest advantages.

Nomellini says the two companies take the same approach, focusing on “breadth and depth of access technologies.” GTT makes a point of letting customers know that they can connect SD-WAN to DSL, Ethernet, cable, wireless, 4G, fiber and other types of access.

Interoute postures itself the same way, Nomellini said, except that it already has the coverage in place for Europe.

“It’s fortunate for us that Interroute really follows the same strategy. Their strategy is to offer a diversity of access types and be able to bring traffic onto the Interoute network as quickly and efficiently as possible,” she said. “And then the organization offers the ability to transport the client traffic from one site to another or all in the cloud via seamless interconnect.”

Details on channel integration have yet to emerge, but Nomellini says the channel accounts for …

… approximately 30 percent of Interoute’s U.K. revenue, and that country is where the majority of the company’s partners are located.

GTT, which bolstered its partner program in December and speaks highly of the channel, will announce further details on the integration at the upcoming Channel Partners Conference & Expo. Nomellini says the companies are familiarizing themselves with each other’s go-to-market strategies, but she says her company’s channel program will be enhanced as a result of the acquisition.

She says GTT wants to headline its SD-WAN product as it increases its channel influence, and the Interoute acquisition is a start.

“This story enhances SD-WAN capability, it enhances network connectivity that we can offer to partners and it also means that we’ll have a lot more resources from client support and an operation perspective from around the world to complement the channel,” Nomellini said.

Interoute started in 2003 and has a 72,000 kilometer fiber network in Europe. GTT Communications was founded in 1998.

“This is an exciting next chapter for Interoute, GTT, our customers and our team,” Interoute CEO Gareth Williams said. “The combined assets and strengths of our two companies create a powerful portfolio of high-capacity, low-latency connectivity, and innovative cloud and edge infrastructure services to support our customers in the global digital economy.”