After several years of buying towers overseas, American Tower has validated its continuing interest in the domestic wireless market, by purchasing Global Tower Partners for $4.8 billon. The deal is expected to close in the fourth quarter of this year.
The acquisition, which increases American’s tower count by 25 percent, comprises 5,400 domestic towers, 800 property interests under third party communications sites, more than 9,000 domestic managed sites and 500 towers in Costa Rica.
“Using our disciplined approach, we have passed on a number of portfolios over the years, only investing in the most compelling tower assets,” said James Taiclet, American Tower president and CEO. “The acquisition of the GTP portfolio will give us significant expansion of scale in our core market, the United States. We believe this portfolio is an excellent strategic fit with our existing operations.”
The acquisition gives American Tower an increased presence in several top urban markets, including New York, San Francisco and Washington, D.C. Plus, it doubles ATC’s rooftop portfolio with an additional 9,000 sites atop buildings. Overall, GTP’s towers are in the top two-thirds in the top 100 BTAs.
“We are increasing our presence in urban areas across the United States,” Taiclet said. “There is a lot of upside in both the [American and GTP rooftop] portfolios as the urbanization of the network proceeds.”
GTP’s towers have room to grow in terms of additional tenants. They average two tenants each, compared with American’s 2.6 tenants, and have the capacity for four tenants.
“The structural integrity off the assets is solid. The locations are very favorable. The management in the past has been top notch, positioning them well for additional collocations,” Taiclet said.
The GTP acquisition could be seen as a vote of confidence to the future growth of macrocellular sites.
“We are still in the early stages of the 4G deployment cycle,” Taiclet said. “Data use continues to rise and the vast majority of that incremental traffic will be carried over macro tower sites. By adding 5,400 towers our future collocation capability becomes even more compelling.”
GTP’s portfolio is expected to generate $345 million in revenue for American Tower in 2014. AT&T is GTP’s largest customer at 25 percent, followed by Sprint at 17 percent, T-Mobile at 16 percent and Verizon at 14 percent.