On Tuesday, SBA Communications Corporation, an independent owner and operator of wireless communications infrastructure across North and Central America, announced it has entered into a definitive merger agreement with certain affiliates of TowerCo , an independent tower company, that own 3,252 tower sites in 47 states across the U.S. and Puerto Rico. The deal will take SBA’s tower count to over 15,000.
Under the agreement, SBA  (Boca Raton, Fla., USA) will pay $1.2 billion in cash and 4.6 million shares totaling an overall transaction o $1.45 billion. According to SBA, the cash consideration shall be paid from a combination of cash on hand, existing credit facilities and up to $900 million in financing commitments from J.P. Morgan. The transaction is expected to close in the fourth quarter of 2012.
SBA estimates the TowerCo assets will produce approximately $93 to $95 million in tower cash flow for the full calendar year 2013.
"We believe the TowerCo assets are high quality, well located and have ample capacity for additional tenants,” says Jeffrey Stoops, SBA’s president and CEO. “The towers are in excellent shape from a legal, systems and operational perspective, and will be readily integrated into our existing portfolio.
This is SBA’s second large acquisition this year, having acquired 2,300 tower sites from Mobilitie LLC in February for $1.09 billion.
“As was the case with our Mobilitie acquisition earlier this year, we expect these towers will be in great demand for the future cell-splitting needs of US wireless carriers, which needs we anticipate will flow from the continued growth in consumer demand for wireless data services,” says Stoops. “We expect this transaction will be immediately accretive to AFFO per share."
SBA, valued at $6.64 billion, is the smallest of the three major U.S. tower companies. According to a Reuters report , its competitors, American Tower Corp and Crown Castle International Corp have also made efforts to increase capacity in order to meet the growing demand for data from mobile users.
American Tower spent $500 million to buy 2,500 towers from Telefónica's Mexican unit in December, while Crown Castle acquired NextG Networks Inc to expand its small antenna business, says Reuters .