Fresh off the closing of its acquisition of One Source Networks in October, GTT has made another M&A move. Yesterday after the markets closed, they announced the acquisition of Telnes Broadband.
Telnes Broadband offers internet access, managed networks and services, and VoIP across the US, with a few thousand customers on their rolls. Through the acquisition, GTT gains some more revenue scale for its current product set across a wider customer base, as well as an expanded channel presence which may turn out to be the most significant result over time.
After reaching its $400M annualized revenue goal last year, GTT established a new one of $1B. In an interview here just a couple months ago, GTT CEO Rick Calder suggested that while organic growth would play a growing role in that expansion, more M&A was definitely part of the plan. This deal was a rather smaller one than their last few though, and I expect it won't take them a whole lot of integration work before they are ready for another.
The price tag for Telnes was $18M, of which $3M was stock and the remainder cash which was funded out of GTT's revolving line of credit facility. For that price, they tack on a business that generated $17M in revenue and $1M in adjusted EBITDA. Q Advisors helped Telnes with its side of the transaction.