DURHAM — The end is fast approaching for Stephen Clark as chief executive officer of SpectraSite, but he doesn’t have time for regrets. In fact, Clark insists he is excited about life following the merger of the Cary-based wireless tower operator he launched in 1997 with rival American Tower later this year.
“I’ve always been a startup guy,” Clark told Local Tech Wire just an hour before he was presented with the Entrepreneurial Excellence award at the Council for Entrepreneurial Development’s annual excellence awards dinner. “I may be ready to start something else.”
Clark pointed out that “I’ll still be on the board” of directors once SpectraSite mergers with Boston-based American Tower in an all-stock deal valued at $3.1 billion. And for the time being, his days are full with meetings and planning for the transition and integration of the two companies.
“We have a lot of people putting in a lot of hours working on this,” Clark explained. “Our operations team has been a great story. They have stayed together through the downturn, the turnaround and now the merger.”
A Turnaround Story
Both companies have towers in the country’s top 100 markets, and the firms outlined several hundred million dollars worth of overlap in their pre-merger talks. “We will have a $1 billion company with $400 million in free cash flow,” he said, his voice brimming with enthusiasm.
American Tower has operations in the top 400 metro markets, so its footprint is much larger. However, SpectraSite offers some revenue-generators its future parent doesn’t, such as in-building wireless systems for shopping malls and places like casinos.
The merger will cap a remarkable comeback for SpectraSite, which declared bankruptcy, restructured and got out of bankruptcy in “73 days” as Clark noted with pride. “Cash flow was never a problem,” he added, stressing that long-term debt presented problems that had to be addressed by the restructuring. The rebuilding left the company’s original stockholders with a 5-percent stake, he added.
Once rebuilt, however, SpectraSite still faced major challenges — a primary one being “the consolidation of our customers,” he explained. As Cingular bought AT&T Wireless, Nextel and Sprint agreed to merge and Alltel made its own buy, Clark said SpectraSite had to grow “in order to be taken seriously” by the larger wireless carriers. The American Tower deal was a result of that changing landscape.
What merged operations will mean for SpectraSite’s more than 2,000 employees remains to be determined. American Tower and SpectraSite stockholders will have special meetings on Aug. 3 to vote on the merger. In the meantime, Clark says officials from both firms continue to talk with the Department of Justice about the particulars of the deal. The Federal Communications Commission has already granted its blessing, he said, and the merger approval process is moving forward faster than he thought it would.
Praise for His ‘First Investor’
In accepting the CED award, Clark made sure to salute the members of his management team who were with him. “I’ll be forever in their debt,” he said.
Clark also took time to delivery a gentle shot in the ribs of venture capitalists while praising a longtime partner who was seated next to him for dinner – Chris Hegele of Intersouth Partners.
“I am concerned that the entrepreneurial pendulum has swung too far” against startups, Clark told the crowd of 400. He pointed out that venture capitalists “have to have courage” to make investments “that aren’t in mezzanine rounds”.
Hegele, who worked at Kitty Hawk Partners, met Clark when Clark was seeking financing for one of his startups — PCX Corporation, a manufacturer of electrical distribution systems. Hegele convinced Kitty Hawk to put money into PCX, which was later sold. When Clark launched SpectraSite, Hegele was his “first investor”, as Clark describes him, again.
“He’s a brave man,” Clark said with a smile.
Hegele would have not of that. Asked what he saw in Clark and his two companies that led to his decision to invest, Hegele didn’t hesitate a second in responding.
“The reason is standing right there,” Hegele said, nodding toward Clark. “He’s not only a remarkable CEO; he’s also a remarkable person.”
Rick Smith is managing editor of Local Tech Wire.