American Tower is set to buy privately held MIP Tower Holdings, the parent of telecom tower operator Global Tower Partners, in a $4.8 billion deal to take advantage of the roll-out of 4G wireless network in the United States.
American Tower will pay about $3.3 billion in cash and assume about $1.5 billion of debt.
The deal will enable American Tower to add about 15,700 towers in the United States and Costa Rica to its existing portfolio of 56,000 towers worldwide.
As major U.S. telecom operators such as AT&T and Verizon Communications have increased their Capex budgets for the current year, it will benefit telecom tower vendors.
Global Tower, formed in 2003 by acquiring 187 towers from American Tower, is controlled by a consortium of funds managed by the Macquarie Group with minority partners including Dutch pension fund manager PGGM.
The latest deal comes a month after American Tower said it would acquire about 4,500 telecom towers in Brazil and Mexico from Latin American telecom service provider NII Holdings for $811 million, Reuters reported.
GTP owns and operates approximately 5,400 domestic towers, 800 domestic property interests under third-party communications sites, and has management rights to over 9,000 domestic sites, which are primarily rooftop assets. In addition, GTP owns 500 communications sites in Costa Rica.
American Tower expects that in aggregate, in 2014, the portfolio will generate approximately $345 million in revenues and approximately $270 million of gross margin.
American Tower Jim Taiclet said that GTP has constructed and acquired an outstanding U.S. portfolio of tower, rooftop and land assets, which is complementary to that of American Tower. GTP’s towers boast a high quality customer base, a strong position with respect to ground ownership and lease terms, and additional structural capacity available to facilitate future leasing activity.