GTT Posts Gains, Looks Ahead to More M&A

November 14th, 2013 by · Leave a Comment

GTT posted higher revenues and EBITDA today, boosted by a full quarter's contribution from the former Tinet network that it bought from Inteliquent earlier this year. In addition, the company suggested further acquisitions might be on the road ahead as part of an aggressive growth plan.

GTT posted $45.1M in revenue for the quarter, up 59% sequentially due mostly to the acquired IP and Ethernet revenues. Meanwhile, adjusted EBITDA rose to $7.6M, more than double last quarter's $3.7M and moving their margins up to nearly 17%.  Aside from non-cash items, loss per share was $0.04.

A few weeks back the company refinanced its debt, cutting off 250 basis points, and the integration is apparently largely complete.  Along with their higher stock price, they definitely seem to be ready for further inorganic opportunities. Their stated goal is $400M in annualized revenue and $100M in adjusted EBITDA.

So what might GTT buy to go with the PacketExchange (2011), nLayer (2012), and Tinet (2013) assets? I'd have to guess they'd be looking at further scale in the IP/Ethernet space. But other than perhaps Hurricane Electric there aren't really that many assets with the IP revenue or traffic scale in the neighborhood of Tinet that are within their reach.

So perhaps we'd be talking more about something more focused on the managed MPLS/Ethernet space targeting cloud connectivity, where there are more options.  Hmmm...

gttnetwork

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