Investor Marc Ganzi has completed his company’s purchase of ExteNet Systems, raising more than $1.4 billion in debt and equity. That amount represents the price paid for ExteNet as well as “dry powder” to invest in ExteNet’s business and in future acquisitions.
“We plan to be very acquisitive in the small cell sector,” said Ganzi. “We raised over $1.4 billion in new capital to support buying the business and then reserved a great deal of that capacity to put back into the business to build new networks and acquire other complimentary assets.”
ExteNet Systems develops and owns carrier-led and neutral host distributed antenna systems and small cell/Wi-Fi networks. The company has completed a number of successful indoor and outdoor deployments, and is currently working on a 4-carrier DAS in the Chicago subway system and a fiber-fed small cell deployment with Verizon Wireless in San Francisco.
Ganzi is now chairman of ExteNet’s board, a group which also includes representatives from Stonepeak Infrastructure Partners and Goldman Sachs, two of the biggest investors in the recapitalized ExteNet. Ganzi’s Digital Bridge Holdings, which also owns tower company Vertical Bridge, led the acquisition of ExteNet, which was previously owned by an investor group that included tower giant SBA Communications.
SBA profits from sale, will invest in small cells on its own
SBA purchased just under 20% of ExteNet for $43 million back in 2010. The SBA board clearly thought the Digital Bridge offer was a good one, but the tower company is not walking away from small cells.
“Small cells is a very interesting business that we’re actually taking steps to develop internally with the focus on our own assets and a more indoor and managed rooftop approach,” SBA CEO Jeffrey Stoops told investors earlier this month. “And we just thought that the money that it would have taken to acquire ExteNet – not only immediately, but the amount that would have been necessary to put into it over the next couple years – we are better served and our shareholders are better served by directing that elsewhere.”
ExteNet’s opportunity
ExteNet says it is now the largest privately-held DAS provider in the United States. Co-founder Ross Manire maintains an equity stake in the recapitalized company, as well as a seat on its board, and other members of the management team are equity owners as well. But it’s not just investors who stand to profit from the DAS/small cell opportunity.
“This is an important issue for commercial property owners,” Ganzi told an audience at last month’s HetNet Expo.
Ganzi estimated the total opportunity approaches $1.7 billion in annual re-occurring rent. “This is far bigger than the tower opportunity in the late 1990’s,” he said.
This story was updated 11/18/15.
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