American Tower to Buy Rival SpectraSite for $3.1 Billion
American Tower Corp. agreed Wednesday to acquire rival SpectraSite Inc. for $3.1 billion in a deal to create a network of 22,600 wireless and broadcast towers and accelerate consolidation in the tower industry.
The stock transaction follows a string of mergers among wireless carriers that lease tower space and are seeking additional signal capacity to move beyond voice services as more consumers use cellphones to download video content and play games.
“The carriers are very aggressively building out networks, and the networks need towers to build out these services,” said Clayton Moran, an analyst at Stanford Group.
Boston-based American Tower expects to issue 181 million shares to acquire Cary, N.C.-based SpectraSite in a transaction the firms expect to close in the second half of this year, subject to shareholder and regulatory approvals.
The deal to create the nation’s largest tower company, with more than $1 billion in annual revenue, would combine American Tower’s 14,800 towers -- 12,400 in the United States, with the rest in Brazil and Mexico -- with SpectraSite’s 7,800 U.S. communications sites.
That would give the combined company a market-leading share of more than one-quarter of all U.S. communications towers -- but probably not enough to draw antitrust concerns from federal regulators, Moran said.
The boards of both companies have unanimously approved the agreement. SpectraSite shareholders would receive 3.575 shares of American Tower Class A common stock for each common share held. Based on American Tower’s closing stock price Tuesday, this exchange ratio equals $61.53 a share, a 9.5% premium over SpectraSite’s Tuesday closing price.
The combined firm would carry the American Tower name and would be based in Boston.
SpectraSite shares rose $5 to $61.20 on Wednesday and American Tower shares fell 1 cent to $17.20, both on the New York Stock Exchange.