SBA will pay TowerCo $1.2 billion in cash and 4.6 million shares, implying a total transaction value of $1.45 billion. The transaction is expected to close in the fourth quarter of 2012. SBA estimates the TowerCo assets will produce approximately $93 to $95 million in tower cash flow for the full calendar year 2013.
“We are very pleased with the opportunity to acquire the TowerCo assets,” commented Jeffrey A. Stoops, SBA’s President and Chief Executive Officer. “We believe the TowerCo assets are high quality, well located and have ample capacity for additional tenants. We know the TowerCo management team well, and have the highest regard for them as operators.
SBA, valued at $6.64 billion, is the smallest of the three major U.S. tower leasing companies that includes American Tower Corp and Crown Castle International. But SBA is growing quickly and entry barriers are high for new players. In February SBA bought more than 2,300 tower sites from Mobilitie for about $1.09 billion.
Currently, Crown Castle owns approximately 22,250 towers in the U.S.; while American Tower’s database shows 22,050, according to Wireless Estimator. T-Mobile USA, which owns approximately 8,900 towers in the U.S., has received a second round of bids for its cell towers, attracting offers from companies such as American Tower Corporation and Crown Castle International, according to a report in Bloomberg.com.
If American Tower or Crown Castle are successful in their bid, the deal will be accompanied with bragging rights as to who will be the largest tower owner for years to come, possibly forever with approximately 31,000 towers, says Wireless Estimator.
The high cost of erecting and running cellular communications towers, has driven many operators towards leasing arrangements in recent years. Currently about 17% of all towers are leased, but ABI Research expects the number to rise to about 25% in 2015.