SBA Communications buys TowerCo assets for $1.45B

SBA Communications agreed to purchase all of TowerCo's 3,252 tower sites in 47 states across the U.S. and Puerto Rico for $1.45 billion, substantially increasing its domestic cell site footprint. 

The deal, which is expected to close in the fourth quarter of 2012, includes $1.2 billion in cash and 4.6 million shares of SBA Class A common stock. The acquisition also represents the second multibillion-dollar deal SBA has made this year. In February SBA purchased 2,300 tower sites in the U.S. and Central America from Mobilitie for $1.09 billion and other assets in a cash-and-stock deal. Privately held TowerCo, which was the fifth-largest independent tower company in the United States, was formed in 2004 by industry veterans Richard Byrne and Scot Lloyd.

During a conference call with investors, SBA CEO Jeffrey Stoops said the deal with TowerCo will be the last major one SBA will make this year. The acquisition, he said, "represents a rare opportunity to materially increase the size of our domestic business." Stoops added that 67 percent of the towers SBA is acquiring are in the top 50 U.S. markets, and that most of the towers overall are located in urban and suburban markets. 

A large chunk of the towers SBA is acquiring form TowerCo are towers for Sprint Nextel (NYSE:S), which TowerCo purchased from Sprint in 2008, and the deal will push SBA's share of total revenue that it gets from Sprint from 23 percent to 28 percent. Revenue from AT&T  Mobility (NYSE:T) makes up 20 percent of SBA's revenue, T-Mobile USA makes up 15 percent and Verizon Wireless (NYSE:VZ) contributes 12 percent.

The deal reflects growing momentum in the acquisition of tower assets.  T-Mobile USA's proposed sale of its wireless towers has attracted interest from major tower companies American Tower and Crown Castle, according to a recent Bloomberg report, which cited an unnamed source.

For more:
- see this release
- see this Reuters article
- see this Dow Jones Newswires article

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