The Deal: Crown Castle Falls on Deal for AT&T Cell Towers

NEW YORK (TheStreet) --  Crown Castle ( CCI) was falling in Monday trading after agreeing to a $4.85 billion agreement to operate AT&T Inc.'s 9,700 cellular towers. The purchase boosts Crown's portfolio by one-third as consolidation within cellular-tower market nears its conclusion.

Shares of Crown Castle were falling 2.8% to $73.83 in mid-day trading.

Crown Castle, of Houston, said the deal includes the outright purchase of 600 AT&T towers and that it would bring it between $245 million and $255 million in adjusted funds from operation per year. It has the right to buy the remaining 9,100 towers for $4.2 billion after 28 years.

"Consistent with our focus on the top 100 U.S. markets, nearly half of the AT&T towers are located in the top 50 markets, where we expect the majority of network densification and upgrade activity to occur," said Crown Castle President and CEO Ben Moreland in a statement.

It's the second big purchase of towers by Crown Castle in a year and the second big deal in the sector in about a month. The company in September 2012 agreed to operate T-Mobile USA Inc.'s 7,200 towers in a $2.4 billion, 28-year agreement.

Last month, American Tower (AMT) announced a $4.8 billion acquisition of rival MIP Tower Holdings LLC from backers Macquarie Infrastructure Partners, Dutch pension fund manager PGGM and the target's management. That agreement covers 5,400 cellular towers.

Crown Castle said AT&T, of Dallas, signed a 10-year lease agreement to house its equipment on the towers at about $1,900 per month per tower, with 2% rent increases per year. AT&T will also have access to excess capacity on the towers for upgrading its equipment.

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