American Tower Corporation agreed to acquire rights to approximately 11,324 wireless communications towers and purchase approximately 165 additional towers from Verizon Communications for $5.056 billion in cash. 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.
Under the deal, 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. Verizon will 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%.
American Tower said the deal, in combination with its legacy footprint, will give it 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.
“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,” stated Jim Taiclet, American Tower’s Chief Executive Officer.
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.
http://www.americantower.com/corporateus/investor-relations/press-releases/index.htm
