American Tower Corp. is expected to close soon on the acquisition of Prime Communication Sites L.L.C., which will give Texas-based American nearly 200 additional tower sites and complete the company’s goal of creating “the first nationwide rental tower company.”
American Tower is the nation’s largest independent tower rental company. It already owns more 400 communication towers in 24 states and is backed by Summit Capital and Chase Capital investor groups. The company has headquarters in Houston.
American will purchase Abilene, Texas-based Prime Communication Sites, with its eye on other prospects. American is believed to be in discussions with Meridian Communications of Calabasas, Calif. Meridian only will say it is in discussions with a potential buyer.
Many new companies are entering the wireless communications market and building systems during the next five years. Because the acquisition of antenna sites is a complicated, lengthy and sometimes uncertain process, companies that own and manage existing towers believe they have a high-value offering at this time.
“There’s probably not anyone in the nation we’re not talking to,” said Phil McCabe, vice president of American Tower. American formed in October 1994 to acquire the 28-year-old tower business of Houston-based Bowen-Smith Corp., which originally provided sites for two-way dispatch and microwave transmission for the petroleum and natural gas industries.
“We have about 50 new tower constructions every month and own all the towers. We’re not publicly traded and are looking for acquisitions,” McCabe said.
Carriers prefer to lease towers rather than build or buy; some carriers are selling their towers, then leasing the space, he said.
“We hope to achieve critical mass in every major metropolitan area in the nation, as well as connectivity between those metropolitan areas via the transportation corridors,” McCabe said. American has sites in 30 of the nation’s top 50 markets.
Prime Communication Sites recognized the importance of the tower business several years ago when the federal government was beginning to organize for personal communications services auctions.
“Our original business plan was predicated on the PCS business,” said David Baker, Prime’s vice president of marketing.
Prime bought about 135 towers from another company, which had acquired the towers from MCI Communications Corp. and Western Union. Prime now owns 180 towers, particularly along interstate highways, primarily in Illinois, Kansas, Nebraska, Colorado, Wyoming, Utah, Nevada, Texas, Arkansas, Tennessee, Kentucky, Pennsylvania and Florida.
Meridian’s properties are in southern California. The 40-year-old company owns about 50 towers and manages 30.
Not all tower companies own the properties they offer. Castle Tower Corp. of Houston owns 200 towers but represents the owners of 1,200 rooftops nationwide. Castle recently purchased an option to acquire Atlanta-based TEA Group. TEA provides right-of-way acquisition services. The company hopes it can win the site location business of significant wireless players. Castle is backed by The Centennial Funds of Denver and Berkshire Partners of Boston.
