The Deal: Crown Castle Locks-up Prime Wireless Portfolio

NEW YORK ( TheStreet) -- Crown Castle International Inc.'s $4.85 billion purchase of rights to 9,700 communications towers from AT&T Inc. will remove one of the prime asset portfolios from the wireless infrastructure market.

It may also lead to an increased focus in overseas dealmaking for tower companies, and could provide an incremental boost for AT&T's pursuit of international assets.

Crown Castle CEO Benjamin Moreland said that the U.S. presents "the most compelling risk-adjusted returns" in the tower market, during a Monday, Oct. 21, investor call. Purchasing AT&T's towers will boost Crown Castle's holdings in the top 100 markets as telecoms increase spending on 4G wireless network deployments.

Houston-based Crown Castle is buying the rights to 9,700 towers for 28 years. When the term of the agreement expires, the company will have the option to buy them outright for $4.2 billion. The sale will diminish the pipeline of domestic tower assets.

Chicago carrier U.S. Cellular Corp., which has sold spectrum and other assets in recent years, owns 4,400 towers. However, Crown Castle, American Tower Corp. and SBA Corp. may have to look elsewhere to expand their holdings.

Wells Fargo Securities LLC analyst Jennifer Fritzsche described the AT&T towers as "likely the last U.S. carrier deal of significant size to be done in the U.S. for quite some time," in a Monday note. Crown Castle said Monday it will offer 36 million shares of common stock and 7.5 million shares of series A preferred stock to fund the acquisition.

Evercore's Jonathan Schildkraut noted that if Crown Castle priced the shares around Friday's close of $75.96, it could maintain leverage of roughly 6 times Ebitda following the deal with AT&T.

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