As we close in on the end of 2014, GTT is filling up on cash reserves to take on 2015. Yesterday afternoon they revealed their intention to raise money via a stock offering, the details of which they announced a little while ago. It’s their second such sale of stock this year, having made a similar move this past May.
GTT will be selling 3.5M shares of common stock at $12.75, with another 500K shares allocated for overallotments and such. The company expects to bring in some $41.6M. Coincidentally, that figure also happens to be the amount of cash GTT had on hand at the end of Q3, just before acquiring UNSi a few days later. The new capital they are raising today should leave them with about $50M in cash on hand to start the new year, enough to power further deals.
GTT has stated its intention to make futher acquisitions with a goal of $400M in annualized revenue and $100M in adjusted EBITDA (though some of that via organic means of course). The UNSi deal got them to $250M or so in annualized revenue, and I suspect they have one or more targets in mind for 2015 to bring those goals into range.
Their targets are likely to be managed services providers with an IP/MPLS/Ethernet backbone, but probably not with their own fiber – in keeping with their low capex approach. But beyond that, I suppose it’s just a matter of opportunity.
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