Hicks Muse to Merge Former Platform Co. –

Former Hicks, Muse, Tate & Furst Inc. portfolio company OmniAmerica, a manager of radio and television transmission towers, in November entered into a merger agreement with American Tower, said Jack Furst, a Hicks Muse managing director.

Mr. Furst declined to discuss the agreement’s terms, except to say that the deal was structured as a stock swap, in which OmniAmerica shareholders received 1.1 shares of American Tower for each share of OmniAmerica. At press time, shares of OmniAmerica were trading at $30, while American Tower shares were trading at $28.50.

However, a source familiar with the transaction said the deal had a total transaction value of more than $366 million and that Hicks Muse-which will retain a roughly 7% stake in the merged company-likely will realize a five- to six-times return on its equity when it fully exits the company in the next three to five years.

Hicks Muse last year committed a little less than $100 million to launch OmniAmerica Wireless as its platform to consolidate the transmission tower sector (BUYOUTS Sept. 29, 1997, p. 3). The firm in April merged OmniAmerica Wireless with publicly traded Specialty Teleconstructors, another operator and lessor of transmission towers, in a stock swap that, at the time of the transacition was valued at approximately $575 million on a fully diluted basis, according to a statement from Hicks Muse.

After the merger with Specialty Teleconstructors, Hicks Muse had an approximately 45% stake in the merged company.

Although Hicks Muse will greatly reduce its stake in the merged OmniAmerica should the transaction close, Mr. Furst said the Dallas and New York-based firm still is committed to building the company and will play an active roll in looking for additional acquisition candidates. Hicks Muse also will occupy one of nine seats on the board.

OmniAmerica, based in West Palm Beach, Fla., reportedly owns 246 towers for radio and television broadcasting, paging, cellular and other wireless technologies, and has agreed to develop 470 additional sites.

Should the merger close, American Tower will have 3,052 towers under management, with an additional 840 in development.