Telecom Lead America: T-Mobile USA to sell approximately 7,200 towers to Crown Castle for $2.4 billion in cash.
Crown Castle will have the exclusive right to lease and operate the T-Mobile towers for approximately 28 years. In addition, Crown Castle will have the option to purchase such towers at the end of the respective lease terms for approximately $2.4 billion, which payments, if exercised would be primarily between 2025 and 2048.
The tower transaction is part of T-Mobile’s challenger strategy to solidify its competitiveness in the telecom industry by investing in areas where it anticipates the strongest return for customers.
“T-Mobile USA is working to make our 4G network stronger, faster and dependable for consumers, and this transaction will support our ongoing $4 billion network modernization initiative that is the cornerstone of this effort as we work tirelessly to continue to deliver our amazing 4G services nationwide,” said John Legere, chief executive officer of T-Mobile USA.
Crown Castle is focusing on the top 100 US markets.
83 percent of T-Mobile towers are in the top 100 markets and 72 percent located in the top 50 markets.
The T-Mobile assets are expected to provide significant growth driven by the continued demand for wireless data services.
The transaction increases its tower count by approximately 33 percent, the transaction consideration represents only approximately 9 percent of Crown Castle’s enterprise value.
“Further, we expect the impact from the contemplated transaction and related expected debt financing to be accretive to our 2013 adjusted funds from operations per share and approximately 5% accretive to our long-term adjusted funds from operations per share,” said Ben Moreland, president and chief executive officer of Crown Castle.
Crown Castle expects to fund the transaction with cash on hand and debt financing.