American Tower announces acquisition of NII Holdings

American Tower has announced that it has reached an agreement with NII Holdings to acquire up to 2,790 towers in Brazil and 1,666 towers in Mexico in two separate transactions, for approximately $413 million and $398 million, respectively.

The transaction agreements provide that all payments, including the tower rent, will be made in local currency. American Tower expects to use cash on hand and borrowings under its existing revolving credit facilities to fund the acquisition.

American Tower expects the towers will collectively generate approximately $149 million in annual run rate revenues and approximately $55 million in annual gross margin and anticipates that the acquisition will be immediately accretive to adjusted funds from operations upon closing. Both Nextel Brazil and Nextel Mexico have agreed to leaseback the towers from American Tower for a minimum 12-year initial lease term with additional renewal options thereafter.

NII International Telecom S.C.A, a subsidiary of NII based in Luxembourg, has agreed to provide certain credit support with respect to the obligations of Nextel Brazil.

The majority of the portfolio consists of towers located in and around major population areas and along major highways. On average, the towers have a tenancy ratio of just over one tenant per tower, with Nextel Brazil or Nextel Mexico as the primary tenant, providing significant opportunities for future site leasing growth.

American Tower expects to invest approximately $50 million in start-up capital expenditures associated with the two portfolios.

Jim Taiclet, chairman, president and CEO, American Tower said, “Through this acquisition, American Tower will gain significant incremental scale in our Mexican and Brazilian operations, and we anticipate leveraging the strong demand backdrop in both markets to drive meaningful revenue and cash flow growth for many years to come.”

The transactions are subject to regulatory approvals and the initial closing under each transaction is expected to be completed in the fourth quarter of 2013. These initial closings are expected to be followed by subsequent closings of additional tranches of towers as certain closing requirements relating to the remaining tranches are satisfied.

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