Tower Stocks See Action Following SBA's (SBAC) $1.1B Asset Acquisition (AMT) (CCI)
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Two tower companies are trading in opposite directions Tuesday following the announcement of a large acquisition by SBA Communications (Nasdaq: SBAC).
Ahead of the bell this morning, SBA said it entered an agreement to acquire 2,300 "tower sites in the US and Central America and certain indoor and outdoor distributed antenna system (DAS) assets in Chicago, Las Vegas, New York City and Auburn, Alabama." The acquisition will be made for $1.1 billion total, consisting of $850 million cash and 5.25 million shares of its Class A common stock.
Mobilitie is the company selling the towers and DAS assets in the transaction.
On the news, American Tower (NYSE: AMT) is about 1.4 percent higher while Crown Castle (NYSE: CCI) is just about flat on the session. Reuters notes American Tower paid about $500 million to acquire 2,500 towers from Telefnia's (NYSE: TEF) Mexican unit last December, while Crown acquired NextG Networks shortly thereafter.
SBA is paying about $500,000 per tower, which one Macquarie analyst believes is a "little steep." He said SBA should have paid somewhere between $300,000 and $400,000 each. Due to the higher price paid, Macquarie thinks the deal will hamper SBA's ability to perform stock buybacks. For its part, SBA said it thinks "the Mobilitie assets will produce approximately $75 million in tower cash flow for the full calendar year 2012, of which approximately $16 million is attributable to the DAS assets."
Another notable move is DISH Networks (Nasdaq: DISH). Last week it was rumored AT&T (NYSE: T) might make a bid for DISH as it looks to broaden its spectrum assets. This new deal may have AT&T doing more business with SBA.
SBA shares are up about 1.9 percent at last check.
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Ahead of the bell this morning, SBA said it entered an agreement to acquire 2,300 "tower sites in the US and Central America and certain indoor and outdoor distributed antenna system (DAS) assets in Chicago, Las Vegas, New York City and Auburn, Alabama." The acquisition will be made for $1.1 billion total, consisting of $850 million cash and 5.25 million shares of its Class A common stock.
Mobilitie is the company selling the towers and DAS assets in the transaction.
On the news, American Tower (NYSE: AMT) is about 1.4 percent higher while Crown Castle (NYSE: CCI) is just about flat on the session. Reuters notes American Tower paid about $500 million to acquire 2,500 towers from Telefnia's (NYSE: TEF) Mexican unit last December, while Crown acquired NextG Networks shortly thereafter.
SBA is paying about $500,000 per tower, which one Macquarie analyst believes is a "little steep." He said SBA should have paid somewhere between $300,000 and $400,000 each. Due to the higher price paid, Macquarie thinks the deal will hamper SBA's ability to perform stock buybacks. For its part, SBA said it thinks "the Mobilitie assets will produce approximately $75 million in tower cash flow for the full calendar year 2012, of which approximately $16 million is attributable to the DAS assets."
Another notable move is DISH Networks (Nasdaq: DISH). Last week it was rumored AT&T (NYSE: T) might make a bid for DISH as it looks to broaden its spectrum assets. This new deal may have AT&T doing more business with SBA.
SBA shares are up about 1.9 percent at last check.
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