GTT Communications, Inc., a leading global cloud networking provider to multinational clients, announced a definitive agreement to acquire One Source Networks (OSN), a provider of global data, Internet, Session Initiation Protocol (SIP) trunking and managed services to Fortune 1000 companies.

GTT has engaged KeyBank National Association and SunTrust Robinson Humphrey to provide committed financing for the transaction. The financing is expected to consist of a new $400 million Term Loan B and $50 million revolving credit facility, which will replace GTT’s current credit facility and fund the acquisition. The syndication process for this new debt will begin immediately. At closing, GTT expects its ratio of total debt to annualized adjusted EBITDA to be approximately 4:1 on a pro forma basis. 

Under the terms of the agreement, GTT will pay $175 million for the acquisition, comprised of approximately $165 million in cash and approximately $10 million in GTT common stock, plus any adjustments for net working capital. For the three months ending June 30, 2015, One Source Networks reported revenue of $20.5 million, gross profit of $9.1 million, adjusted EBITDA of $4.2 million, and capital expenditures of $0.4 million. For the twelve months ending June 30, 2015, One Source Networks reported revenue of $74.6 million, gross profit of $31.0 million, adjusted EBITDA of $13.9 million, and capital expenditures of $2.5 million. The parties expect to close the transaction in late October, 2015 subject to certain regulatory approvals and other customary closing conditions.