28 Nov GTT hires advisors to explore sale of its infrastructure division
The financial whip is about to come down on GTT as it looks to sell off its infrastructure division in order to pay down some of the debt it has built up after numerous acquisitions over the past few years.
McLean, Virginia-based GTT said on Tuesday that it has hired Credit Suisse and Goldman Sachs to act as financial advisors for the possible sale of its infrastructure division.
The news that GTT is selling off some of the assets that it acquired in its $2.3 billion deal to buy Interoute last year and assets from its $590 million deal to buy Hibernia Networks three years ago came as no surprise. During its third quarter earnings call GTT executives said the company was looking to offload pan-European fiber assets, subsea transatlantic fiber and data center infrastructure from those deals.
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“The appointment of Credit Suisse and Goldman Sachs is an important step in our process to explore the sale of our Infrastructure Division,” said Rick Calder, GTT president and CEO, in a statement. “This potential divestiture in no way alters the execution of GTT’s core strategy of providing cloud networking services to large and multinational clients as we deliver on our purpose of connecting people to any location in the world and to every application in the cloud.”
Dating back two years, GTT has closed and integrated 10 acquisitions. Those deals have nearly quadrupled the size of the company, but along the way GTT has built up $3.2 billion in long-term debt.
RELATED: GTT Communications posts $26M loss in Q3
Earlier this month, GTT Communications reported a loss of $26.2 million in its third quarter compared to a net loss of $23.4 million in the same quarter a year ago. GTT posted a loss of 46 cents a share on revenues of $420 million, both of which missed Wall Street expectations. Analysts surveyed by Zacks Investment Research had estimated a loss of 20 cents per share and revenue of $427 in the quarter.
GTT’s second quarter sales were $434 million, which was below Wall Street consensus estimated of $448 million. GTT lost 59 cents per share in the second quarter while analysts were projecting a loss of 5 cents per share.
On its second and third quarter earnings calls, Calder said GTT was planning on increasing its number of sales reps to 400 by the end of this year and 500 by the end of next year. Calder said that GTT needed a bigger sales force to drive a larger volume of sales and installs to outpace its churn.
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