Crown Castle Pays $461M For Tower Development Corp.

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The Houston tower giant has paid Berkshire Partners $461 million cash for the 336 towers it owns and operates in the U.S. and Puerto Rico. Crown Castle said Friday the towers have an average tenancy of about two carriers per tower.

The acquisition of Tower Development Corp. should add $25 million to $27 million to Crown Castle’s site rental gross margin in the first full year of ownership and be immediately accretive to Adjusted Funds from Operations per share, Crown Castle said. The buy said it funded the acquisition with available cash, including cash on hand, cash from borrowings under its revolving credit facility and cash from the sale of approximately 3.5 million net shares of common stock at an average price of $85.52 per share year-to-date.

“Our acquisition of TDC is another successful milestone in our long-term relationship with Berkshire Partners,” said Crown Castle President/CEO Ben Moreland. “The TDC acquisition represents an attractive and accretive investment opportunity that further enhances Crown Castle’s portfolio of wireless infrastructure.”

It is unclear if TDC President Ross M. Jones or any other of the current members of the management team of the privately-held tower operator will convey to Crown Castle. On its website, parent company and seller, Boston-based Berkshire Partners, said “Our investment team brings a wide range of relevant professional backgrounds to the Berkshire table. We have been general managers, consultants, turnaround artists and commercial and investment bankers. This diversity of backgrounds has been further strengthened by the knowledge gained through investing together over several business cycles.”

The company does not appear to be run by a raucous bunch. Berkshire’s corporate profile boasts a steady-as-she-goes approach to business. “The original Berkshire team—which came together in the mid-1980s—has expanded significantly as our capital base and investment scope have grown. We note proudly that, except in the case of retirement, no partner has left the firm in its three decades of operation.”

The deal was announced after the closing bell on Wall Street Friday. Shares of Crown Castle (NYSE: CCI) closed up $1.28 or 1.48 percent at $88.05.

April 11, 2016 |
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