CTI Towers, a cell tower company, has secured up to $30 million in debt financing and closed its first third-party acquisition, purchasing five towers from a major wireless carrier.
CTI Towers was formed by Comcast Ventures, the venture capital affiliate of Comcast Corp., in the fall of 2011. It launched with a management contract for 800 towers that were previously owned and operated by Comcast Cable subsidiaries. To date, CTI has acquired 230 of the 800 towers that it manages.
The five-tower purchase was the first CTI has made outside of Comcast’s portfolio. The company has two more tower purchases currently in the pipeline, which will be funded through the debt financing.
CTI Towers plans to secure towers within strategic, high-demand regions. This acquisition continues CTI Towers’ growth strategy outside the Comcast portfolio
“We will continue to seek strategic acquisitions to fuel growth as the wireless industry responds to the demand for wireless broadband services,” Tony Peduto, CEO, CTI Towers, told AGL Bulletin.
CTI will continue to purchase assets from Comcast as they become available, in addition to acquiring third-party towers. Peduto does not foresee selling the portfolio to one of the big three in the near future. In fact, his goal is for CTI to be the fourth-largest tower company.
“We are in this for the long haul,” he said. “At the end of the day, when we get to a certain size we will need to decide whether to go public or stay private. It will also depend on the position of our equity stakeholders. It is going to take a lot of hard work to get [to number four] but that is a goal that we would love to achieve.”
Peduto said CTI Towers has no preference between organically grown towers and wireless carrier assets. Additionally, the company is interested in developing its own sites.
“It depends on the condition of the tower, the location of the structure and the competing structures,” he said. “We will continue to work with developers and carriers’ towers that are available.”
The debt facility will allow CTI Towers, one of the top-10 largest U.S. tower operators, to accelerate its acquisitions. Previously, the company had no leverage.
“The tower industry was built on leverage,” Peduto said. “We thought it would be a good way to bring tower assets in without giving up any additional ownership.”
Peduto said his company was pleased with the interest rate they got for the money. The companies that have put debt facilities in place have gotten very aggressive. A lot of it is driven by low interest rates.