Cell tower consolidation
US cell phone tower owner SBA Communications announced it would acquire US rival AAT Communications for around $1 billion. The deal, according to sources, will extend SBA's coverage to 47 of the 48 continental United States, bringing together SBA's east coast holdings and AAT's Western US ones.
The cell tower industry is, for the most part, separate from the actual wireless telephone providers. SBA has as clients Cingular Wireless (AT&T) and Sprint-Nextel, while its competitors serve those companies and/or Verizon or T-Mobile or the handful of smaller companies. SBA is now #4 in the industry, competing against American Tower Corp., Crown Castle International, and Global Signal. Those companies were also in the running to buy AAT.
Curiously enough, the move marks a dramatic recovery by SBA, which sold around 800 towers located in the Western U.S. to AAT a few years ago in a $200 million deal. SBA will now have some 5,300 towers.
Like the fiber-optic cable sector, the US cell tower industry overbuilt in the late 1990s and a minor crash followed, in which many companies sold off assets, as SBA did, to keep afloat. Since that time, the industry has made a comeback. It is now highly consolidated, with only a few firms owning and/or managing the towers. This makes sense, as only the big can serve the big, and the number of cell phone providers has been drastically decreased over the past five years.
This is not the first major acquisition in this industry. American Tower in 2005 merged with rival SpectraSite in $3 billion deal. The company has around 22,000 towers in the US, Mexico, and Brazil.
Global Signal owns 3,000 towers and manages over 7,000 more for small third-parties, in the US, Canada, and the UK. In 2005, it signed a lease to manage with an option to buy 6,700 towers owned by Sprint Corporation (before the Nextel merger). The 10-year deal was for $1.2 billion. The company was founded by equity group Pinnacle Holdings in 1995, which still holds a serous minority stock position.
Crown Castle owns or manages 12,000 towers to the major phone companies in the US, Australia, and Puerto Rico. In 2004, the company sold its UK broadcast holdings to National Grid for $2 billion.
7:54:53 PM 
|
|
