Cary-based TowerCo is selling 3,252 towers for wireless networks to SBA Communications in a deal valued at $1.45 billion.
The deal essentially means the end of TowerCo, which employs some 58 people at its headquarters in Cary and Triangle, over 70 people overall. However, all employees have been “offered the opportunity to remain with us until the deal closes,” TowerCo Chief Executive Officer Richard Byrne told WRAL Tech Wire in a Q&A interview..
The acquisition includes $1.2 billion cash plus 4.6 million shares in SBA.
The TowerCo properties stretch across 47 states as well as Puerto Rico.
SBA is based in Florida.
The deal is expected to close in the fourth quarter.
Byrne said the “time was right” for the deal and that the company, which is privately held, didn’t sell due to any financial issues.
“First of all, we congratulate the SBA team,” Byrne said of the deal. “As Jeff Stoops, CEO of SBA said in the call today, we’ve maintained a long and productive relationship with their management team. There’s a great deal of mutual respect between both teams. We completed a similar transaction together in 2008. In this case, the timing was right and the deal made sense for both companies.”
Byrne said the deal “represents 100% of our tower assets.”
The acquisition is Boca Raton, Florida-based SBA’s largest in at least 13 years, according to data compiled by Bloomberg. The company in February agreed to pay about $1.1 billion for 2,300 towers in the U.S. and Central America from Mobilitie LLC, as well as outdoor distributed antenna system assets in Chicago, Las Vegas, New York City and Auburn, Alabama. That cash and stock deal completed in April, and was projected to add about $75 million in tower cash flow in 2012.
TowerCo, which is privately held, is the fifth-largest independent tower operating company in the U.S. Investors include Soros Strategic Partners LP and Vulcan Capital.
Founded in 2004 by tower industry veterans Byrne and Scot Lloyd, chief operating officer, the company owns or leases some 3,200 towers, according to its website.
TowerCo also has contracts to build towers for communications providers.
The Soros firm invested in TowerCo in 2005. Vulcan Capital and Altpoint Capital became equity partners in the company.
JPMorgan Chase & Co. provided $900 million in financing and acted as financial adviser for SBA, while Greenberg Traurig LLP provided legal council. Wells Fargo & Co. acted as financial adviser to TowerCo, and Paul, Weiss, Rifkind, Wharton & Garrison LLP was its legal adviser.
In 2008, TowerCo acquired 3,080 towers from Sprint Nextel in a deal valued at $670 million. Sprint then signed a long-term lease with TowerCo.
“We are very pleased with the opportunity to acquire the TowerCo assets,” said Jeffrey Stoops, SBA’s CEO. “We believe the TowerCo assets are high quality, well located and have ample capacity for additional tenants. We know the TowerCo management team well, and have the highest regard for them as operators.
“The towers are in excellent shape from a legal, systems and operational perspective, and will be readily integrated into our existing portfolio,” he added. “As was the case with our Mobilitie acquisition earlier this year, we expect these towers will be in great demand for the future cell-splitting needs of US wireless carriers, which needs we anticipate will flow from the continued growth in consumer demand for wireless data services.”
(Bloomberg news contributed to this report.)