Selling Some Stock, GTT Rebuilds Its Warchest

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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Categories: Financials · Internet Backbones