American Tower Corporation (NYSE: AMT) today announced that it has entered into a definitive agreement to acquire 100% of the outstanding common membership interests of MIP Tower Holdings LLC, a private real estate investment trust, which is the parent company of Global Tower Partners (“GTP”), and related companies, for a total purchase price of approximately $4.8 billion, subject to customary adjustments. GTP is majority owned by Macquarie Infrastructure Partners together with minority partners including Dutch pension fund manager PGGM and management. GTP owns and operates approximately 5,400 domestic towers, 800 domestic property interests under third-party communications sites, and has management rights to over 9,000 domestic sites, which are primarily rooftop assets. In addition, GTP owns 500 communications sites in Costa Rica.
The purchase price is expected to be satisfied with approximately $3.3 billion in cash and the assumption of approximately $1.5 billion of existing indebtedness. American Tower expects to use cash on hand and borrowing capacity under its existing revolving credit facilities, as supplemented by additional anticipated sources of debt financing, to satisfy the cash consideration for this acquisition and other previously announced acquisitions. American Tower intends to maintain its financial and capital structure policies, consistent with investment grade credit metrics, and expects to use the quality cash flow and margin characteristics of the GTP portfolio to de-lever over time back to its stated target leverage range.
American Tower expects that in aggregate, in 2014, the portfolio will generate approximately $345 million in revenues and approximately $270 million of gross margin, and is anticipated to be immediately accretive to Adjusted Funds From Operations (“AFFO”) upon closing.
Jim Taiclet, Chairman, President and Chief Executive Officer of American Tower, said: “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. Moreover, GTP’s management of these assets has been excellent, as confirmed through our rigorous due diligence process. 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.