CS&L Strikes Again, to Acquire Tower Cloud

June 20th, 2016 by · Leave a Comment

Communications Sales & Leasing has made its second acquisition of the year.  The network REIT that was born from Windstream in the Spring of 2015 has signed a definitive agreement to acquire Tower Cloud.  

towercloud-southeastTower Cloud operates metro and regional fiber network across 16 markets in the southeastern USA that are focused on the wireless backhaul segment.  They have 90K strand miles in service and 180k strand miles in planned deployments under contract.  Tower Cloud was founded back in 2006, led by CEO Ron Mudry after the sale of Progress Telecom, which he had previously led, to Level 3.

For CS&L, this acquisition looks rather similar to the PEG Bandwidth deal, focusing on wireless backhaul and adding a complementary geography.  The fiber-to-the-tower segment seems to be fertile ground for the REIT's roll-up plans, and the addition of another operating business tilts them further toward that side of things relative to the triple-net lease structure they started with.

The acquisition will cost CS&L some $230M, with $180M of that in cash and the balance in stock.   CS&L expects to achieve $6M in annualized synergies over the next three years via the integration with PEG Bandwidth.

One is not a pattern, but two probably is.  CS&L is certainly still in the market for other such assets to roll up if they are available.

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Categories: Fiber Networks · Mergers and Acquisitions · Metro fiber

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