American Tower Corporation (NYSE: AMT) today announced that it has
entered into a definitive agreement pursuant to which American Tower
will acquire rights to approximately 11,324 wireless communications
towers and purchase approximately 165 additional towers from Verizon
Communications, Inc. for $5.056 billion in cash at closing, subject to
certain adjustments. Under the definitive agreement, American Tower will
have the exclusive right to lease and operate the Verizon towers for a
weighted average term of approximately 28 years. In addition, American
Tower will have fixed price purchase options to acquire the towers based
on their anticipated fair market values at the end of the lease terms.
American Tower intends to finance the transaction in a manner consistent
with maintaining its investment grade credit rating and has obtained
committed financing for the transaction from Goldman Sachs, who also
acted as financial advisor. The transaction is subject to customary
closing conditions and is expected to close during the first half of
2015.
Jim Taiclet, American Tower’s Chief Executive Officer stated, “The
Verizon tower portfolio is a unique asset. Due to outstanding design and
management by the Verizon Wireless network operations team, the
portfolio boasts a number of key attributes that we believe will
facilitate robust leasing opportunities under our focused management.
These attributes include average tower heights approaching 200 feet,
ample structural capacity and ground space, very attractive transmission
locations with relatively few competing sites, a solid ground lease
profile, and excellent documentation and technical information. By
acquiring access to this high quality asset base, American Tower will be
well positioned to capture incremental leasing activity and extend our
ability to drive strong annual organic core growth and solid AFFO per
share growth, well into the future.”
“Demand for mobile bandwidth by U.S. consumers is expanding dramatically
as the proliferation of advanced devices and applications continues. As
evidenced by the just-concluded AWS spectrum auction, the Big Four
domestic carriers plan to address this growth with significant ongoing
investment in both spectrum and their physical networks. We believe that
by aggressively marketing these relatively under-utilized towers to
additional tenants, we will enable faster deployment of this spectrum,
accelerating the expansion of broadband coverage throughout the U.S.”
Verizon’s tower portfolio, in combination with American Tower’s legacy
footprint, will establish the largest wireless communications real
estate portfolio in the United States with over 40,000 tower sites. This
transaction expands and strengthens American Tower’s relationships with
major U.S. wireless operators, and 85% of pro forma domestic rental and
management revenue will be generated by the Big Four U.S. carriers.
American Tower’s global portfolio, which is expected to be nearly
100,000 towers after giving pro forma effect for this and other recently
announced transactions, will be uniquely positioned to capitalize on the
worldwide proliferation of advanced mobile communication and broadband
services.
Verizon Transaction Highlights
Verizon has contracted to sublease space on the towers for a minimum of
10 years with monthly rent of $1,900 per site and fixed annual rent
escalators of 2%. Verizon will have customary renewal options that could
potentially extend the full term of its sublease to 50 years. Verizon
will also have access to certain additional space on the towers for its
future use, subject to certain restrictions. American Tower will have
the right to sublease other available capacity on the towers to
additional tenants.
The portfolio of approximately 11,489 towers spans all 50 states with
approximately 50% of the sites in the top 100 BTAs. The average height
of the tower portfolio is approximately 190 feet, with capacity for
incremental colocation. Nearly 85% of the revenue generated by the
portfolio is from investment grade tenants.
American Tower estimates that the Verizon tower portfolio will generate
approximately $410 million in domestic rental and management revenue,
approximately $235 million in gross margin and will be break-even to
AFFO per share in its full first year of operation, and accretive
thereafter. American Tower expects the transaction will further support
its ability to generate strong annual AFFO per share growth over the
long-term.
Conference Call Information
American Tower will host a conference call tomorrow morning at 8:30 a.m.
ET to discuss the Verizon transaction. Supplemental materials for the
call will be available on the Company’s website, www.americantower.com.
The conference call dial-in numbers are as follows:
U.S./Canada dial-in: (877) 586-5042
International dial-in: (706)
645-9644
Passcode: 81149869
When available, a replay of the call can be accessed until 11:59 p.m. ET
on February 20, 2015. The replay dial-in numbers are as follows:
U.S./Canada dial-in: (855) 859-2056
International dial-in: (404)
537-3406
Passcode: 81149869
American Tower will also sponsor a live simulcast and replay of the call
on its website, www.americantower.com.
About American Tower
American Tower is a leading independent owner, operator and developer of
wireless and broadcast communications real estate with a global
portfolio of approximately 70,000 communications sites. American Tower
values diversity and firmly believes that its philosophy of inclusion
positively influences how it manages its business and serves its
customers. For more information about American Tower and this
transaction, please visit the “Company & Industry Resources” sections of
our investor relations website at www.americantower.com.
Cautionary Language Regarding Forward-Looking Statements
This press release contains statements about future events and
expectations, or “forward-looking statements,” all of which are
inherently uncertain. We have based those forward looking statements on
management’s current expectations and assumptions and not on historical
facts. Examples of these statements include, but are not limited
to, statements regarding the proposed closing of the transaction
described above, expected financial projections for the portfolio and
the impact on our consolidated results, the anticipated closing date,
the expected cash consideration and the expected sources of funds to pay
for the transaction described above and other previously announced
transactions. These forward-looking statements involve a number of risks
and uncertainties. For important factors that may cause actual results
to differ materially from those indicated in our forward-looking
statements, we refer you to the information contained in Item 1A of our
Form 10-Q for the quarter ended September 30, 2014 under the caption
“Risk Factors” and in other filings we make with the Securities and
Exchange Commission. We undertake no obligation to update the
information contained in this press release to reflect subsequently
occurring events or circumstances.
AFFO is a non-GAAP financial measure. For more information, see our Form
10-Q for the quarter ended September 30, 2014 under the captions
“Management’s Discussion and Analysis of Financial Condition and Results
of Operations – Non-GAAP Financial Measures” and “– Results of
Operations.” Additionally, AFFO per share is a non-GAAP measure, and is
defined as AFFO divided by the diluted weighted average common shares
outstanding.
Copyright Business Wire 2015