Berkshire and Pamlico to sell Lightower to Crown Castle for about $7.1 bln

Crown Castle International Corp has agreed to acquire Lightower for about $7.1 billion in cash. The sellers include Berkshire Partners and Pamlico Capital. Morgan Stanley & Co. LLC served as financial adviser to Crown Castle while Evercore and Citigroup Inc did likewise for Lightower. Lightower owns about 32,000 route miles of fiber located mostly in top metro markets in the Northeast.


HOUSTON, July 18, 2017 (GLOBE NEWSWIRE) — Crown Castle International Corp. (NYSE:CCI) (“Crown Castle”) announced today that it has entered into a definitive agreement to acquire LTS Group Holdings LLC (“Lightower”) from Berkshire Partners, Pamlico Capital and other investors for approximately $7.1 billion in cash (subject to certain limited adjustments) (“Transaction”), representing approximately 13.5x expected Adjusted EBITDA contribution during Crown Castle’s first full year of ownership. Lightower owns or has rights to approximately 32,000 route miles of fiber located primarily in top metro markets in the Northeast, including Boston, New York and Philadelphia. Following completion of the Transaction, Crown Castle will own or have rights to approximately 60,000 route miles of fiber.

“We are excited about the addition of Lightower given its attractive fiber footprint and the value we believe it will create for our shareholders,” stated Jay Brown, Crown Castle’s Chief Executive Officer.

“Lightower’s dense fiber footprint is well-located in top metro markets in the Northeast and is well-positioned to facilitate small cell deployments by our customers. Following the Transaction, we will have approximately 60,000 route miles of fiber with a presence in all of the top 10 and 23 of the top 25 metro markets. We expect the Transaction to be immediately accretive to our AFFO per share and long-term dividend growth and, as a result, anticipate increasing our annual common stock dividend rate, subject to approval by our board of directors, between $0.15 and $0.20 per share following the closing of the Transaction.”

Key Strategic and Financial Benefits
· Expands deep, dense metro fiber footprint. The Transaction will double Crown Castle’s fiber footprint, resulting in Crown Castle owning or having rights to approximately 60,000 route miles of fiber, making it one of the largest owners of metro fiber in the U.S. With a fiber footprint after the Transaction that will cover 23 of the top 25 most populous U.S. markets, Crown Castle is well-positioned to capitalize on the growing demand for mobile connectivity as network architecture continues to evolve and bandwidth demands continue to increase.

· Provides scale for small cell deployments. By combining Lightower’s dense metro fiber footprint with Crown Castle’s industry-leading small cells platform, including Crown Castle’s strong customer relationships and proven real estate and network engineering capabilities, the Transaction is expected to expand the small cell opportunities available to Crown Castle and enhance its ability to meet the small cell deployment needs of its wireless carrier customers while reducing the time and capital required for such deployments.

· Immediately accretive to AFFO per share and common stock dividend. Crown Castle expects the Transaction to be immediately accretive to its Adjusted Funds from Operations (“AFFO”) per share and increase its previous 6% to 7% long-term annual dividend growth target to 7% to 8%. In the first full year of Crown Castle’s ownership, Crown Castle expects Lightower will contribute $850 million to $870 million in site rental revenues, $510 million to $530 million in Adjusted EBITDA and $465 million to $485 million in AFFO before financing costs. On a net income per share basis, the Transaction is expected to be modestly dilutive during the first full year of ownership, due primarily to the expected depreciation and amortization expense associated with the Transaction. After the Transaction closes, Crown Castle anticipates that it will increase its annual common stock dividend rate, subject to approval by Crown Castle’s board of directors, between $0.15 and $0.20 per share to reflect the expected contribution from Lightower. Consistent with past practice, in its third quarter 2017 earnings release, Crown Castle expects to provide its Outlook for 2018 and make a related annual common stock dividend announcement, which will be in addition to the dividend increase announcement that Crown Castle expects to make following the closing of the Lightower acquisition.

· Proven track record of execution and high-quality cash flows. As a leading provider of fiber solutions, Lightower has generated strong revenue growth with attractive margins and returns on invested capital by focusing on high-bandwidth, multi-location opportunities. Lightower has a high-quality mix of customers consisting of large enterprises, government agencies, healthcare providers, educational institutions and carriers. With its recurring revenue model underpinned by long-term contracts, Lightower’s customer contracts have a weighted average remaining current term of approximately four years, including approximately $2.7 billion of remaining contract value. Additionally, Crown Castle expects that the vast majority of Lightower’s assets and revenues will qualify as real property and rents from real property, respectively, under the Internal Revenue Service’s rules governing real estate investment trusts (“REIT”).

Transaction Details
Crown Castle intends to finance the Transaction consistent with maintaining its current investment grade credit metrics, utilizing cash on hand and equity and debt financing, including borrowings under its revolving credit facility. Further, in connection with the Transaction, Crown Castle has received financing commitments from Morgan Stanley Senior Funding, Inc. and BofA Merrill Lynch totaling approximately $7.1 billion for new unsecured bridge facility.

Morgan Stanley & Co. LLC acted as financial advisor to Crown Castle, and Cravath, Swaine & Moore LLP provided legal counsel to Crown Castle. Evercore and Citigroup Inc. acted as the financial advisors to Lightower, while Ropes and Gray LLP provided legal counsel to Lightower.

Crown Castle anticipates closing the Transaction by the end of 2017. The Transaction is subject to federal and state regulatory approvals, including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and review by the U.S. Federal Communications Commission, and other customary closing conditions.

Conference Call Details
Crown Castle has scheduled a conference call for Wednesday, July 19, 2017, at 7:30 a.m. eastern time to discuss the Transaction and its second quarter 2017 earnings results. The conference call may be accessed by dialing 800-967-7185 and asking for the Crown Castle call (access code 7235918) at least 30 minutes prior to the start time. The conference call may also be accessed live over the Internet at Any supplemental materials for the call will be posted on the Crown Castle website at

A telephonic replay of the conference call will be available from 10:30 a.m. eastern time on Wednesday, July 19, 2017, through 10:30 a.m. eastern time on Tuesday, October 17, 2017, and may be accessed by dialing 888-203-1112 and using access code 7235918. An audio archive will also be available on the company’s website at shortly after the call and will be accessible for approximately 90 days.

Crown Castle provides wireless carriers with the infrastructure they need to keep people connected and businesses running. With approximately 40,000 towers and 60,000 route miles of fiber supporting small cells following the completion of the Lightower acquisition, Crown Castle is the nation’s largest provider of shared wireless infrastructure with a significant presence in the top 100 U.S. markets. For more information on Crown Castle, please visit