Vertical Bridge is acquiring more than 200 towers from CiG Wireless in a transaction structured as a merger worth $143 million.
“This transaction brings together two complementary cellular tower operators, and the combined business will have a broad geographic presence across the United States,” said Paul McGinn, CEO, CiG Wireless.
The deal, which is expected to close during the second quarter of 2015, has received the support of the company’s largest shareholder, Fir Tree Partners, a New York-based private investment firm. Upon closing, the company’s employees will become employees of Vertical Bridge.
“We have known Paul and the rest of the CiG Wireless team as competitors and partners over the course of many years, and we look forward to them joining our team,” said Alexander L. Gellman, CEO and co-founder of Vertical Bridge.
CiG Wireless acquired 108 towers from 2013 to 2014, more than doubling its portfolio. It bought 38 towers from Liberty Towers in August 2013, 49 towers from Southern Tower Antenna Rental, 19 towers from PTA-FLA, Inc. and two towers from Fidelity Towers.
CiG Wireless reported $1.8 million in tower revenue for the three months ending September 30, 2014, which was an increase of $0.8 million or 87 percent compared with the same period of the prior year. The increase was primarily attributable to revenue generated from the acquisitions completed during 2013 and 2014.
The company’s loss from operations for the third quarter was flat at $2.1 million year over year. For the second quarter, it reported a loss of $2.5 million, compared with $1.5 million year over year. The loss for the first quarter was $2 million, which was flat compared with the same period for the prior year
Yet, during the same time, CiG Wireless’ stock price dropped from $3.30 to 25 cents, a 92 percent dive. The tower company’s total long-term debt grew from $19.7 million to $33.2 million in the past year. Additionally, total stockholders’ deficit grew from $6.5 million $20.1 million in the last year.
Additional information regarding the transaction will be included in the company’s information statement to be filed with the SEC and mailed to the company’s shareholders.