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American Tower Buys SpectraSite

Tue, 02/27/2007 - 1:47pm
Susan Rush

American Tower Corporation is snapping up fellow tower operator SpectraSite to become the largest tower operator in the United States. The deal is valued at $11.3 billion.

An American Tower-SpectraSite union will result in a company that has 22,6000 communications sites and a 21 percent share of the market.

American Tower Chief Executive Jim Taiclet said the company believes a merger with SpectraSite will make the company stronger, expand its revenue and customer base, as well as make its tower portfolio more diverse. Coming into the transaction, American Tower had more than 14,800 communications sites, while SpectraSite is bringing 7,800 sites to the deal.

The company expects the merger to result in cost synergies of roughly $30 million to $35 million per year.

Under the terms of the deal, SpectraSite shareholders will receive 3.575 shares of American Tower Class A common stock for each common share of SpectraSite they own. Upon completion of the deal, American Tower stockholders will own roughly 59 percent of the combined entity, giving SpectraSite shareholders 41 percent.

The companies, which say the deal already has been approved by their respective boards, expect the transaction to close in the second half of 2005.

Taiclet will continue to serve as CEO of the combined company. Brad Singer will be CFO, while SpectraSite's President and CEO Steve Clark will join the American Tower board of directors, as will three other SpectraSite board members.

Separately, American Tower reported first-quarter revenue of $184.4 million, up 9 percent year over year. The company recorded a rental and management segment revenue increase of 10 percent to $181.6 million. The tower operator posted a net loss of $31.6 million, or 14 cents per share, for the quarter.

Crown Castle International operates nearly 12,000 communications sites in the United States and Australia. SBA Communications owns more than 3,100 towers as part of its continuing operations.

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