With 3,600 owned or managed towers in its inventory, Pinnacle Holdings Inc. ranks among the largest tower companies in the industry, but the way it built its portfolio differs from its peers.
Pinnacle has completed more than 300 acquisitions to reach its present tower count and grown from a company focused primarily on the Southeast to one with a growing national presence. Although the company has announced one large acquisition-the purchase earlier this year of nearly 1,900 sites from Motorola Inc.-Pinnacle primarily buys towers from small and medium-sized tower owners.
The company has completed other substantial transactions, including 201 sites purchased from Southern Communications Services Inc., a subsidiary of Southern Co., and 166 towers purchased from MobileMedia Corp. Both transactions occurred last year.
However, the company’s typical acquisition involves only a handful of towers. In 1998, the company completed 80 acquisitions consisting of 526 towers, and through the first half of this year, the company completed 63 acquisitions consisting of 166 sites.
“Our aim is not to be the biggest tower company; it’s to be the tower company that owns the best towers,” said Ben Gaboury, president of Pinnacle Towers. “If an opportunity comes along, and it is a good price with good assets, we’ll look at it and we may make a play for it, but we’re not just going to go out there and waste money acquiring towers just to own the most towers.
“Our foundation has been as an acquisition company focused primarily on mom-and-pop types of tower acquisitions,” said Gaboury. “For the most part (those towers) are underutilized, underdeveloped and undermarketed, so our company was formed with a consolidation strategy of consolidating those types of tower companies and growing into a larger Pinnacle.”
Pinnacle differs from its peers in another way as well. Where other companies are scrambling to offer a one-stop shop, Pinnacle focuses exclusively on site rental. The company said it has consistently been able to achieve 20-percent, if not more, organic growth quarter to quarter on its towers.
The one thing that has surprised the company about the tower industry is the amount of money being paid for towers.
Gaboury said he is bullish on the industry going forward. The company said business is still coming in from traditional tenants like paging carriers and the government, but new customers also are emerging.
“My prediction would be that if you go out three to five years that we’ll have a whole new group of customers that have not even formed yet, that are going to be providing some sort of a wireless service for business or the public that will need to find homes to house their equipment,” said Gaboury. “We just see the outlook in general for wireless going through the roof, and on our end of it, we’re going to be the recipient of that growth.”
