Phoenix Tower International (PTI) has expanded its reach into small cells in the United States with the purchase of Syscom Telecom, which manages and markets more than 80,000 sites
for small cell and macro cell deployments with various small cell master agreements in place with wireless operators.
“PTI has been evaluating opportunities to back a small cell focused team in the United States as a way to help our customers with their next generation deployments” stated Dagan Kasavana, CEO of Phoenix Tower International.
PTI is mostly known as a multi-national tower owner, owning or managing more than 5,500 sites in South America, Caribbean, Central America and Mexico. But, recently, PTI has diversified with investments across the Americas, including the acquisition of fiber in Mexico, the DAS investment in Fast Site Solutions in Central America, and the small cell investment in Syscom LatAm in South America.
The key to expanding into other areas, such as small cells, is to find the right team with a differentiated offering, Kasavana said.
“We felt like these 80,000 nontraditional sites [of Syscom Telecom], which might have been seen as too small to hold a macro installation, are the perfect capacity, size and height for small cell installations. That was a way to differentiate our offering and we saw that the Syscom Telecom team over the last few years has major inroads with the carriers,” he said.
With the deployment of 5G in the offing, carriers are developing dense networks of thousands of small cells. An estimated 80 percent of all new sites will be small cells in the near future. Kasavana said the timing is right to get into the small cell space.
Although the carriers have been self-performing to meet their small cell needs, Don Van Splunteren, global vice president of sales, said, they will need third-party help to meet the estimated small cell needs for 5G.
“The carriers are going to need partners that understand not only their roadmap from 4G to 5G but also the complexity that a small cell network brings with it,” he said. “We need to offer them the infrastructure in a plug-and-play way and take the complexity out of the equation.”
An essential component of small cell deployment is using a centralized RAN architecture with a tower as the hub. We continue to believe that small cells built around a tower can leverage the C-RAN architecture for the network needs. Tower are going to be an essential component of ongoing 4G deployment and most assuredly 5G,” Kasavana said.
August 6, 2015 — Apparently T-Mobile did not sell all of its towers to Crown Castle back in 2012. This week, the carrier entered into a contract to sell the rights to more than 600 wireless communication tower sites to Phoenix Tower International, which will have the exclusive right to manage and operate the sites via its local U.S. subsidiaries.
Dagan Kasavana, Phoenix Tower International CEO, said the T-Mobile tower locations are well situated for additional lease-up opportunities. Terms of the transaction remain confidential, industry sources estimate the deal at between $150 million and $175 million.
Private companies have dominated the M& A market in 2015. The Phoenix Tower deal follows the Vertical Bridge’s purchase of towers owned by CiG Wireless, U.S. Cellular and iHeartRadio, as well as NTELOS’ tower sale to Grain Management and CTI Towers’ sale to InSite Wireless.
“It’s interesting that we are seeing private companies stepping up and beating public companies in these transactions,” said Clayton Funk, managing director, Media Venture Partners.
Prior to co-founding Phoenix Tower International, Kasavana and Natalya Kashirina (VP of M&A), were involved in mergers and acquisitions of U.S.-based Global Tower Partners. Phoenix has owned a small portfolio of U.S. towers in the United States, but this is its first material domestic acquisition.
“The [Phoenix Tower] management team has significant experience operating and leasing tower sites in the United States and is thrilled to have a significant portfolio of high quality sites in the United States to offer to our customers,” Kasavana.
Furthermore, this transaction represents another milestone in Phoenix Tower’s expansion and allows us to service our customer’s strategic needs across the Americas.”
The U.S. tower acquisition was preceded by Phoenix Towers’ acquisition of T4U Holding Brasil by Phoenix Tower in June. T4U’s towers will be merged into Phoenix Tower’s existing Brazilian tower business, Phoenix Tower do Brasil, which will own and operate 529 wireless infrastructure assets with a pipeline of more than 250 wireless towers under construction.
Including Phoenix Tower do Brasil, the T-Mobile acquisition brings Phoenix Tower’s total site count to 1,600 towers.
In September 2014, Phoenix Tower International acquired American Tower’s Panamanian business, which consisted of 60 telecommunications sites. Founded in 2013, Phoenix Tower has operations in Costa Rica, Panama, Dominican Republic, Colombia, the United States and Brazil.
Proving there is life after GTP, Dagan Kasavana, who ran the mergers and acquisitions department for Global Tower Partners, has started his own venture, focusing on acquiring, developing, owning, leasing and operating cell towers in Latin America. The company, known as Phoenix Tower International, was formed to focus on middle market transactions.
Of the major markets in Latin America, Phoenix Tower will be looking for opportunities in stable countries that already have public and private tower companies.
“There are key markets in Central and South America that are good for tower ownership,” Kasavana said. “Brazil is an interesting market,where wireless growth and penetration are projected to be fueled over the next three to five years, but so are Columbia, Panama and Costa Rica.
“Growth is projected throughout the region, and we have the ability to capture some of the upside, which is similar to what we have seen in the United States in the last three to five years,” he added.
Since Global Tower Partners sold its portfolio, Kasavana has considered opportunities running M&A programs for various tower companies as well as going it on his own. “I talked with investors who supported this concept for a new tower company that is focused on select opportunities [in Latin America] that others are not,” he said.
In forming Phoenix, Kasavana has brought in several colleagues from his days at GTP. Former GTP Senior Legal Advisor Tim Culver has joined Phoenix in a similar position. Natalya Kashirina, who worked with Kasavana in GTP’s M&A department, is now Phoenix vice president, mergers and acquisitions. Additionally, Orlando Porras, formerly of Ernst and Young, who did many projects for GTP, is now chief financial officer for Phoenix.
Kasavana plans to deal with the cultural challenges of Latin America by using a personal touch. Phoenix will remain based in Boca Raton, Fla., but will build offices in a region as it gains significant market share there. “We are well suited to address these challenges because we don’t see these as satellite offices leveraging off of the U.S. presence. We are going to build them from the ground up, leveraging the local people, the local customers and local operations. And I will be on a plane regularly to meet with them personally,” he said.
A variety of equity investors are involved in Phoenix, which will be formally announced in the near future. The company has a number of transactions in the works and is working to close them.
“At GTP, we had a great run, and it is really fun to see [the former GTP partners] all blossom into new business lines to do new things after the sale,” Kasavana said. “Obviously, we learned a lot of that from Marc Ganzi [former CEO of GTP]. I owe him a lot of credit for instilling the entrepreneurial spirit within me. It is something I take with me going forward.”