Final bids are due “imminently”, a person close to the process told Capacity. The company is hoping to announce the resulting deal “by the end of August”, which puts a declaration about six weeks away.
The sale is urgent as GTT seeks to pay its debts: its share price is continuing to fall and its market cap is now only 13% of the total funds it has spent on acquisitions over the past few years.
GTT spent around US$3.2 billion on buying infrastructure companies, even while it was switching its business model from infrastructure to services. It completed purchase of Hibernia Networks in January 2017 for $590 million, and Interoute at the end of May 2018 for $2.3 billion. It also bought companies such as Global Capacity – $161 million in cash and shares – and Perseus for $39.5 million.
But then the company’s share price collapsed. In early February its share price last night on the New York Stock Exchange was $13.11, valuing the whole company at $743 million, less than a quarter of what it has spent on acquisitions in the previous three years.
Since then the price has fallen further. Last night the shares closed at $7.30, giving GTT a market cap of $430 million.
In November 2019 GTT appointed Goldman Sachs and Credit Suisse as bankers to advise on the future of its infrastructure division, and then details were circulated to the industry, as exclusively reported in Capacity in February 2020.
Since then there have also been significant changes at the top of the company. In April Steve Berns came in as CFO, following the departure of Mike Sicoli in September 2019, and the interim tenure of Dan Fraser.
In May the company announced Rick Calder, the CEO who had masterminded the acquisitions, would step down on 1 June. Chief revenue officer Ernie Ortega was named as the interim CEO. Don MacNeil, former CEO of FiberLight, is now chief operating officer.
