Verizon Communications has hired the same investment bank that helped AT&T and T-Mobile US sell their towers to Crown Castle, according to Bloomberg. New York’s TAP Advisors is an investment bank that specializes in tower transactions and has broad expertise in wireless. Two of TAP’s founding partners have worked with Verizon in the past.
Crown Castle and Verizon have been hinting that they are both interested in a deal. Crown Castle CFO Jay Brown said earlier this month that his company would be interested in the Verizon towers. Verizon CFO Fran Shammo made headlines when he told investors that AT&T’s tower sale opened Verizon’s eyes to the possibility of using its towers to raise cash.
From Crown Castle’s perspective, the time could be right for a new tower acquisition. The company is completing the integration of the 9,700 AT&T towers and expects to soon have almost all those towers ready for co-location.
AT&T and T-Mobile US did not actually sell their towers to Crown Castle; instead they sold exclusive rights to lease the towers. In this role, Crown Castle has the ability to co-locate other carriers on the towers.
$500,000 per tower
Analyst Jennifer Fritzsche of Wells Fargo Securities thinks the Verizon towers would fetch roughly $500,000 each, about the same price Crown Castle paid for the AT&T towers. Bloomberg is reporting that Verizon is ready to sell 12,000 towers, so the carrier would net $6 billion from the sale.
The company could use the cash in upcoming spectrum auctions, although it seems unlikely that a deal could close in time for the November AWS auctions. T-Mobile US has announced plans to tap the bond market in preparation for these auctions, but Verizon is already saddled with more than $100 billion in debt due to this year’s deal with Vodafone.
Verizon Communications had $6.4 billion in cash on its balance sheet as of June 2014, down from $54 billion at the end of 2013.
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