Crown Castle, a leading provider of towers to the communications industry, is purchasing Global Signal, a Sarasota, Fla.-based competitor in the tower business, for approximately $4 billion. The transaction makes Crown Castle the nation's largest tower company serving the cellular telephone industry in the top 100 U.S. markets.
Global Signal shareholders will receive 1.61 Crown Castle shares or $55.95 in cash for each Global Signal share. A termination fee of $139 million was set if the deal falls through. The merger is expected to be completed in Q1 2007.
Prior to the deal, Crown Castle owned, leased or managed more than 11,000 towers in the U.S.; more than 750 are broadcast tower sites. The acquisition will bring the company's total tower portfolio to more than 24,000 wireless sites; 16,240 of those in the top 100 markets. The average price per tower in the transaction is about $542,000, according to Bloomberg.
"We expect this extraordinary combination of companies with the most towers in the best markets to create significant value for our customers and shareholders," said John P. Kelly, Crown Castle's CEO. "The complementary nature of our U.S. portfolios will result in a high-quality, diversified customer base, with 76 percent of site rental revenues from the four largest U.S. wireless carriers."
In its most recent quarter, Crown Castle reported sales of $193.8 million, an increase of 13 percent from $168.2 million a year ago. Rental revenue from U.S. sites was up $20.4 million to $154.5 million, compared to $134.1 million in the same quarter in 2005. The company's net loss was down to $13.3 million, or 9 cents a share, compared with a net loss of $225.8 million, or $1.08 a share, a year ago. For Global Signal, revenues increased $44.9 million to $122.5 million for the second quarter, 2006. Net loss was $17.0 million, up from $9.4 million for the same quarter a year ago.
