NEW YORK ( The Deal) -- American Tower (AMT) said Friday, Sept. 6, it would acquire MIP Tower Holdings LLC in a $4.8 billion cash and assumed debt deal that would add 5,400 cellular towers in the United States to its portfolio.
Terms of the deal call for Boston-based American Tower to pay $3.3 billion in cash and assume about $1.5 billion in debt for MIP, which is the parent company of Global Tower Partners and related companies. GTP is majority owned by Macquarie Infrastructure Partners with support from Dutch pension fund manager PGGM NV and management.
American Tower said that in addition to GTP's 5,400 domestic towers, the company owns and operates an additional 800 properties via related parties and has management rights to an additional 9,000 sites. The target company also owns 500 sites in Costa Rica, meaning the deal would add more than 15,000 sites to American Tower's existing global total of more than 56,000.
The company said that it expects the portfolio to be acquired to generate about $345 million in 2014 sales and about $270 million of gross margin."GTP has constructed and acquired an outstanding U.S. portfolio of tower, rooftop and land assets, which is highly complementary to that of American Tower," company Chairman and CEO Jim Taiclet said. "GTP's towers boast a high quality customer base, a strong position with respect to ground ownership and lease terms, and additional structural capacity available to facilitate future leasing activity." The deal comes at a time of expansion in the U.S. cellular industry as wireless carriers look to build their next-generation 4G networks. Taiclet said the GTP deal "solidifies our path to achieving our strategic goals" to grow funds from operations over the next five years. The purchase is American Tower's second major deal in two months. The company in August said it would acquire about 4,500 towers in Latin America from NII Holdings for $811 million. The company said it expects to use cash on hand and borrowing capacity under its existing revolving credit facilities to pay for the GTP deal, supplemented by additional anticipated sources of debt financing.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV