Cloud networking provider GTT Communications agreed to acquire Interoute, operator of one of Europe’s largest independent fiber networks and cloud networking platforms, for approximately €1.9 billion ($2.3 billion) in cash. GTT plans to pay for the acquisition through a combination of cash on hand and debt.

According to a related 8-K filing, Goldman Sachs Bank, Goldman Sachs Lending Partners, Credit Suisse, Cayman Islands Branch, Credit Suisse Securities, SunTrust Bank, SunTrust Robinson Humphrey, KeyBank, KeyBanc Capital Markets, Morgan Stanley Senior Funding, Citizens Bank and ING Capital agreed to provide debt financing. The financing is expected to consist of the following:

  • A new €640 million ($787.7 million) term loan B facility
  • A new $1.3 billion term loan B facility
  • A $200 million revolving credit facility
  • Senior unsecured notes yielding gross proceeds of $750 million

The new facilities will be used to, among other things:

  • Refinance GTT’s existing senior secured credit facilities
  • Refinance some of Interoute’s existing debt
  • Provide financing for a portion of the acquisition
  • Pay fees, costs and expenses incurred in connection with the above transactions

GTT also received $250 million in committed equity financing for the acquistion from their largest institutional investor, The Spruce House Partnership, and Acacia Partners.

Goodwin Procter served as GTT’s legal advisers on this transaction.