To maintain its wireless tower portfolio expansion,
American Tower Corp.
) has struck a deal with MIP Tower Holdings LLC, a private real
estate investment trust and owner of Global Tower Partners
("GTP"). The deal is worth nearly $4.8 billion, subject to
AMER TOWER CORP (AMT): Free Stock Analysis
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American Tower will finance the whole transaction partly through
$3.3 billion in cash and the rest is expected to be met through
funds accessible from revolving credit facility. The deal is most
likely to close by the end of 2013.
GTP currently has 5,400 domestic and 500 international towers
mostly located in Costa Rica. Moreover, it also controls over
9,000 domestic sites, which mainly include rooftop assets.
Thus, acquiring MIP Tower Holdings LLC will not only give
American Tower access to a significant tower base but will also
boost the company's Adjusted Funds From Operations (AFFO) going
forward. Moreover, the tower giant also expects the
newly-acquired towers to contribute around $345 million and $270
million in revenues and gross margin, respectively by 2014.
Last month, American Tower entered into an agreement with
NII Holdings Inc.
) to purchase 2,790 Brazilian and 1,666 Mexican towers for $413
million and $398 million, respectively. These acquisitions will
help the company to consolidate its position in the highly
lucrative Latin American markets, which is mainly dominated by
America Movil S.A.B. de C.V.
American Tower is also on the verge of acquiring 8,000 wireless
towers of Tower Vision, a privately held Indian wireless tower
operator, for nearly $572 million.
The company exited the second quarter of 2013 with 55,720
Wireless network towers and 473 Broadcasting towers.
Geographically, the company operates 22,720 wireless towers and
274 broadcast towers in the U.S. along with 33,473 wireless
towers and 199 broadcast towers outside the U.S.
Hence, we believe that a further acquisition of nearly 13,000
international towers and 5,400 domestic towers in fiscal 2013
will not only pressurize its cash position but will also expand
the company's present debt-to-capitalization ratio of 0.71.
American Tower currently has a Zacks Rank #3 (Hold).