SBA Communications Corp. (SBAC: Quote) Tuesday said it has signed a definitive merger agreement with certain affiliates of TowerCo that own 3,252 tower sites in 47 states across the U.S. and Puerto Rico for a total value of $1.45 billion. The company expects to close the deal in the fourth quarter of 2012.
The transaction value consists of $1.2 billion in cash and 4.6 million of SBA Class A common shares. The total value is based on SBA's average three-day closing price of $54.48 as of June 22, 2012.
SBA, which provides wireless communications infrastructure in North and Central America, expects the acquisition to be immediately accretive to its Adjusted Funds from Operations, or AFFO, per share. Founded in 2004, TowerCo is an independent tower operating company in the U.S.
Jeffrey Stoops, SBA's president and chief executive officer said, "We believe the TowerCo assets are high quality, well located and have ample capacity for additional tenants."
For the full calendar year 2013, SBA expects the TowerCo assets to produce around $93 million to $95 million in tower cash flow.
SBA noted that the cash consideration will be paid from a combination of cash on hand, existing credit facilities and up to $900 million in financing commitments from JP Morgan.
JP Morgan acted as financial advisor and Greenberg Traurig, LLP acted as legal advisor to SBA. Wells Fargo Securities, LLC acted as financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to TowerCo.
Earlier this year, SBA reached a definitive agreement with certain affiliates of Mobilitie LLC to acquire certain entities owning in excess of 2,300 tower sites in the US and Central America and certain indoor and outdoor distributed antenna system assets in Chicago, Las Vegas, New York City and Auburn, Alabama.
The total transaction value was $1.09 billion, consisting $850 million cash and 5.25 million shares of SBA Class A common stock. The company anticipates the Mobilitie assets to produce nearly $75 million in tower cash flow for the full calendar year 2012.
SBAC closed Monday's regular trading at $55.64 on the Nasdaq.
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by RTT Staff Writer
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