SBA Communications Agrees to Acquire 3,252 Towers From TowerCo for $1.45 billion
Posted on: 27 June 2012
SBA Communications Corporation announced today it has entered into a definitive merger agreement with certain affiliates of TowerCo that own 3,252 tower sites in 47 states across the U.S. and Puerto Rico.
The consideration to be paid by SBA will be $1.2 billion in cash and 4.6 million shares of SBA Class A common stock, implying a total transaction value of $1.45 billion based on SBA's average three-day closing price of $54.48 as of June 22, 2012. The shares in the transaction will be subject to certain restrictions on transfer. The cash consideration shall be paid from a combination of cash on hand, existing credit facilities and up to $900 million in financing commitments from J.P. Morgan. The transaction, subject to customary closing conditions, is expected to close in the fourth quarter of 2012. Pro forma for the closing of the transaction, SBA expects that its net debt to annualized adjusted EBITDA ratio will be approximately 7.8x to 8.0x. 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. The towers are in excellent shape from a legal, systems and operational perspective, and will be readily integrated into our existing portfolio. As was the case with our Mobilitie acquisition earlier this year, we expect these towers will be in great demand for the future cell-splitting needs of US wireless carriers, which needs we anticipate will flow from the continued growth in consumer demand for wireless data services. We expect this transaction will be immediately accretive to AFFO per share."
J.P. Morgan acted as financial advisor and Greenberg Traurig, LLP acted as legal advisor to SBA. Wells Fargo Securities, LLC acted as financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to TowerCo.