GTT shares fall for a fourth straight session on Monday, company to acquire KPN International in an all-cash deal

GTT Communications Inc (GTT) said on Monday that it had agreed to acquire Netherlands-based KPN International, a division of KPN N.V., in a cash deal estimated at EUR 50 million.

The acquisition is expected to be finalized during the third quarter of 2019, subject to approvals from regulatory authorities.

KPN International operates a global IP network, which serves enterprise and carrier clients.

GTT shares closed lower for a fourth consecutive trading session in New York on Monday. The stock went down 3.89% ($0.70) to $17.31, after touching an intraday low at $16.94, or a price level not seen since July 2nd ($16.66).

Shares of GTT Communications Inc have retreated 26.84% so far this year, following a 49.61% drop in 2018.

The acquisition of KPN International is to expand the scale and increase depth to GTTs Tier 1 global IP network across 21 countries in Europe, including long-haul fiber routes and metro rings in London, Frankfurt, Paris and Amsterdam.

The company also said that the acquisition would make it the preferred global network supplier for additional 400 strategic enterprise and carrier customers retained by KPN International.

“The acquisition of KPN International deepens our market presence in the European region,” Rick Calder, GTT President and Chief Executive Officer, said in a statement.

“The world-class resources contributed from this acquisition, including a highly experienced team, international network assets and a deep roster of multinational clients, will help us deliver on our purpose of connecting people across organizations around the world and to every application in the cloud,” Calder added.

Analyst stock price forecast and recommendation

According to CNN Money, the 7 analysts, offering 12-month forecasts regarding GTT Communications Inc’s stock price, have a median target of $40.00, with a high estimate of $50.00 and a low estimate of $5.00. The median estimate represents a 131.08% upside compared to the closing price of $17.31 on July 8th.

The same media also reported that at least 6 out of 11 surveyed investment analysts had rated GTT Communications Inc’s stock as “Buy”, while 2 – as “Hold”. On the other hand, 1 analyst had recommended selling the stock.