Crown Castle Int'l To Acquire Rights To AT&T Towers For $4.85 Bln

(RTTNews) - Crown Castle International Corp. (CCI) announced Sunday that it has entered into a definitive agreement to acquire rights to approximately 9,700 AT&T towers for $4.85 billion in cash.

Under the agreement, the company will have the exclusive right to lease and operate AT&T towers for a weighted average term of about 28 years. It will also have the option to buy the towers at the end of the lease terms for option payments of approximately $4.2 billion.

The company expects the impact from the transaction and related financings to be slightly accretive to its 2014 adjusted funds from operations per share and 5% accretive to long-term adjusted funds from operations per share.

AT&T has contracted to maintain its communications facilities on the towers for a minimum of 10 years with monthly rent of $1,900 per site and fixed annual rent escalators of 2%. It will also have access to additional space on the towers for its future use, subject to certain restrictions.

Crown Castle will have the right to sublease other available capacity on the towers to additional tenants.

Crown Castle estimates the towers to contribute approximately $245 million to $255 million to its Adjusted Funds from Operations before financing costs in 2014. The company expects to fund the transaction with cash on hand and equity and debt financing, including borrowings under its revolving credit facility.

The deal is expected to close in the fourth quarter of 2013.