Wireless tower company Crown Castle International Corp. (CCI) said Friday that it has agreed to acquire NextG Networks Inc. for about $1 billion in cash from a group of investors led by private equity firm Madison Dearborn Partners. NextG is a provider of outdoor distributed antenna systems or DAS.
Crown Castle noted that the acquisition will boost its ability to extend wireless infrastructure beyond areas that are traditionally served by towers and also enable it to benefit from the continued demand for wireless data.
Madison Dearborn, Accel Partners, Redpoint Ventures and Meritech Capital Partners purchased NextG in 2009. NextG, which provides outdoor DAS as well as other small-cell solutions, uses fiber-fed systems to operate carrier-class wireless networks.
DAS is a network of antennas connected by fiber to a communications hub designed to facilitate wireless communications services for multiple operators.
NextG currently has more than 7,000 nodes-on-air and a further 1,500 nodes under construction. The company also has rights to over 4,600 miles of fiber.
Houston, Texas-based Crown Castle noted that the acquisition would expand its portfolio of DAS, providing additional wireless coverage and capacity solutions to customers beyond those areas traditionally served by towers. Crown Castle expects to fund the acquisition with debt financing and complete the transaction in the second quarter of 2012.
According to Crown Castle, NextG assets are expected to provide significant growth, as they currently average only 1.25 tenants per network. Following the acquisition, Crown Castle expects to be the largest independent DAS operator in the U.S., with nearly 10,000 nodes and 26 venues in operation or under construction.
Ben Moreland, president and chief executive officer of Crown Castle said, "Increasingly, we believe that small-cell architecture, such as DAS, will be an important complement to traditional macro tower installations."
Crown Castle owns, operates and manages over 22,000 and about 1,600 wireless communication sites in the U.S. and Australia, respectively.
In late October, the company reported net income for the third quarter of $51 million or $0.15 per share, compared to net loss of $135 million or $0.49 per share in the year-ago period. Total revenue for the quarter increased 7 percent to $514 million from $482 million in the same period last year.
In Friday's regular session, CCI is trading at $43.25, down $0.16 or 0.37 percent from Thursday's close.
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