BOCA RATON, Fla.—SBA Communications Corp., the nation’s fifth-largest tower company, is offering $1 billion to acquire AAT Communications Corp., the nation’s sixth-largest tower company.
SBA said it will pick up AAT’s 1,855 owned tower sites along with an additional 250 revenue-producing managed sites in 44 different states. The transaction gives SBA more than 5,300 towers in 47 states, as well as in Puerto Rico and the U.S. Virgin Islands.
“We know the AAT tower portfolio very well, and believe it to have generally the same favorable characteristics as our portfolio, particularly in the areas of quality, capacity, growth and low cost of operation,” stated Jeffrey Stoops, president and chief executive of SBA. “We believe the AAT assets will enhance our strong organic revenue and cash flow growth. The transaction provides us with a nationwide and expanded platform to pursue our asset growth strategy of new tower builds and selective acquisitions and allows us to leverage our fixed overhead costs.”
Tower circles began buzzing with speculation in early March as to who would walk off with AAT and its 1,900 towers. Though the company never announced that it was for sale, RCR Wireless News reported earlier this month that Raymond James analysts Ric Prentiss and Mark DeRussy estimated AAT’s asking price at around $1 billion.
At the time, privately held AAT declined to comment about a possible buyout, but company spokesman Elliot Sloane said the company’s assets were attractive for a number of reasons, namely because their towers are mostly newer and can provide a national footprint.
St. Louis-based AAT built its tower portfolio by acquiring many of its structures. In 2003, AAT bought 784 towers from SBA, essentially picking up all of SBA’s towers in the Western United States. That same year, the company also bought 78 towers in Alabama, Arkansas, Florida, Louisiana, Mississippi and Texas from U.S. Unwired Inc., and in 2004, the company bought all of Signal One L.L.C.’s 226 towers located in Alabama, Georgia, Mississippi and Tennessee. Raymond James puts the company’s leasing revenue at about $85 million.
SBA reported a fourth-quarter net loss of $32.2 million on revenue of $72.4 million. The results were a 10.5-percent increase on the year-ago loss of $41.8 million from revenue of $65.5 million.
During the fourth quarter, SBA said it spent $21.9 million to purchase 73 towers and to build 17 towers. Already this year, the company has built 10 towers and purchased 65, bringing the company’s tower collection to more than 3,300.
SBA said it expects to realize $8.5 million to $10.5 million in annual synergies from the transaction, as well as one-time integration costs of about $10 million. AAT’s site leasing revenue in 2005 was about $83.3 million.
