Radio station group iHeartMedia Inc. (IHRT) is selling 411 broadcast towers to Vertical Bridge Acquisitions LLC for as much as $400 million.
Thomas H. Lee Partners LP and Bain Capital LLC control iHeartMedia, which was formerly known as Clear Channel Communications Inc. Class A shares of the company, which trade over the counter, gained 34 cents, or 4.75%, to $7.50 on Thursday.
The radio group run by MTV co-founder Bob Pittman will lease the towers following the sale.
Richard Bressler, chief financial officer of iHeartMedia, said in a statement that the company continually reviews its assets to "operate them in the most efficient way possible and invest our resources in the highest return opportunities."
Privately-held Vertical Bridge is an acquisitive outfit formed by the management of wireless infrastructure company Global Tower Partners, which American Tower Corp. (AMT) purchased for $4.8 billion in 2013. Chief executive Alexander Gellman noted in a statement that iHeartMedia towers contain transmitters for wireless broadband clients, in addition to radio broadcasting gear.
Vertical Bridge bought six U.S. tower portfolios in September. Following the deal with iHeartMedia, the company will have 2,000 towers. The tower operator previously stated that it raised $500 million in capital, including equity from Digital Bridge Holdings, Jordan Co. and Edgewater Funds, and bank facilities arranged by TD Securities Inc. and Deutsche Bank AG.
Thomas H. Lee Partners and Bain led a roughly $24 billion leveraged buyout of Clear Channel in 2006. The San Antonio, Texas-based broadcast group generates about $6.3 billion in sales from more than 840 U.S. radio stations. The company also owns 88% of international advertising group Clear Channel Outdoor Holdings Inc. (CCO) , and has at times used cash distributions from the unit to reduce its leverage.