Notable Mergers and Acquisitions of the Day 09/28: (CCI) (MDT)/(KH) (SNE) (CT)/(BX)
- Market Wrap: New Home Sales Surge; ChannelAdvisor Goes Public; Japan Falls Flat
- Animal Spirits Alive and Well as U.S. Stocks Buck Massive Japanese Sell-Off
- Streetinsider.com After-Hours Movers 05/23: (BLOX) (P) (MRVL) Higher; (SHLD) (AVEO) (CRM)
- Pandora (P) Pops Higher on Q1 Results; Expands Listener Base by 2.5M Subs
- Corporate Stock Buybacks Driving Today's Action?
- Crown Castle International Corp. (NYSE: CCI) and T-Mobile USA, Inc., a subsidiary of Deutsche Telekom, AG, announced today that they have entered into definitive agreements pursuant to which Crown Castle will acquire rights to approximately 7,200 T-Mobile towers for $2.4 billion in cash at closing (subject to certain adjustments).
Under the definitive agreements, Crown Castle will have the exclusive right to lease and operate the T-Mobile towers for a weighted average term of approximately 28 years. In addition, Crown Castle will have the option to purchase such towers at the end of the respective lease terms for aggregate option payments of approximately $2.4 billion, which payments, if exercised would be primarily between 2025 and 2048. The transaction is expected to close in fourth quarter 2012.
Crown Castle expects to fund the transaction with cash on hand and debt financing. DT will use the proceeds from the transaction to retire corporate debt and strengthen its financial position to provide for funding of growth investments, including T-Mobile’s Challenger strategy.
Following the contemplated transaction, Crown Castle will continue to be the largest wireless infrastructure operator in the US with approximately 30,000 towers and extensive small cell operations in over 50 markets. T-Mobile’s nationwide network remains unchanged today, consisting of approximately 51,000 cell sites, the vast majority of which are leased from third parties, as is common in the industry across the US.
Crown Castle estimates the T-Mobile towers will produce approximately $125 million to $130 million in adjusted funds from operations (“AFFO”) before financing costs in 2013, and have sufficient capacity to accommodate at least one additional tenant per tower without significant incremental capital. T-Mobile has committed to maintain its communications facilities on the towers from Crown Castle for a minimum of 10 years with annual rent escalation provisions tied to the consumer price index. Further, T-Mobile’s rent includes the rights, subject to certain limitations, to complete its current network modernization on these sites.
It is expected that the net effect of this transaction, as reported under US GAAP, will not have a material impact to adjusted OIBDA or annual operating income in 2012 for T-Mobile USA. DT reports results under IFRS. The transaction is expected to result in a material gain impacting Net Income and EBITDA under IFRS for 2012.
- Medtronic, Inc. (NYSE: MDT) and China Kanghui Holdings (NYSE: KH) entered into a merger agreement whereby Medtronic will acquire Kanghui. The agreement calls for Medtronic to pay approximately $816 million in cash ($30.75 per American depository share). The total value of the transaction, net of Kanghui's cash, is expected to be approximately $755 million.
The transaction is expected to close in the next few months and is subject to customary closing conditions, including approval from the shareholders of Kanghui. Medtronic expects the net impact from this transaction to be earnings neutral for fiscal years 2013 and 2014 as the company intends to offset any dilutive impact of the transaction.
- Sony Corp. (NYSE: SNE) and Olympus Corp. entered an agreement whereby Sony will make an investment in Olympus.
Under the agreement, Olympus will issue 34,387,900 common shares to Sony, amounting to about 11.46 percent of its total outstanding common. The shares are priced at ¥1,454 each, for a total investment of ¥50 billion, or about $645 million.
In addition, Olympus will make an effort to ensure that a Sony-nominated director is appointed to the board.
- Capital Trust, Inc. (NYSE: CT) announced a definitive agreement under which an affiliate of Blackstone (NYSE: BX) will acquire its investment management business, operated through its subsidiary, CT Investment Management Co., LLC ("CTIMCO").
Under the terms of the agreement, Blackstone will acquire CTIMCO and its fund co-investments for $20 million. Blackstone will also manage Capital Trust and purchase an 18.2% equity stake in the company. Following the closing, CTIMCO will be integrated into Blackstone's Real Estate Debt Strategies ("BREDS") business.
In conjunction with the transaction, Capital Trust will declare a $2.00 per share special cash dividend, which will be payable as soon as practicable following closing to shareholders of record entitled to vote at a special meeting of shareholders that will be called to approve the transaction. The sources of funds for the special dividend will be cash on hand prior to the transaction and the proceeds from the sale of CTIMCO and related fund co-investments.
Simultaneously with its acquisition of CTIMCO, Blackstone will purchase five million shares of newly issued Capital Trust common stock at a price of $2.00 per share. Blackstone will not receive the special dividend given that its investment in Capital Trust's common stock will close after the record date. The transaction equates to a $4.00 per share valuation for Capital Trust (versus the 60-day trailing average share price of $3.05 as of September 26, 2012), based upon the $2.00 per share post-dividend issue price to Blackstone and the $2.00 per share special dividend.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
You May Also Be Interested In
- NetApp (NTAP) Tops Q4 EPS by 1c; Boosts Buyback, Plans Job Cuts, Initiates Dividend
- Trading Radar for 05/24: Foot Locker (FL), Hibbett (HIBB), Abercrombie (ANF) Report
- UPDATE: Shares of Sony (SNE) Spike; Considers Spinning Entertainment Arm
Create E-mail Alert Related CategoriesSpecial Reports
Related EntitiesDividend, Notable Mergers and Acquisitions, Earnings
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!