As the lone tower company that has been making fiber acquisitions, Crown Castle had been relatively quiet over the last year or so since acquiring Sunesys a year ago and 24/7 and Access Fiber before that. They are quiet no more, however, as today the company announced an agreement to buy FPL Fibernet from NextEra Energy.
In a deal worth approximately $1.5B in cash, Crown Castle is acquiring 11,500 route miles of fiber and conduit throughout the state of Florida and a regional and metro network centered on Texas. Some 6000 of those route miles are in major metro areas, and as you might expect much of the fiber follows energy utility rights-of-way. FPL Fibernet's Florida footprint is its home turf, but the Texas fiber was bought from Grande a few years ago in its own foray into consolidation.
FPL Fibernet has long been on my list of energy-derived fiber assets that could eventually be consolidated, and a purchase by Crown Castle isn't much of a surprise. It's a mostly wholesale asset that will fit well with the company's wireless backhaul business and that has little other baggage for them to deal with. And it likely comes with a relationship (whether new or expanded) with NextEra when it comes to additional fiber expansion projects.
On the other hand, I didn't realize FPL Fibernet might be worth $1.5B, which is some 50% more than it took to buy Sunesys. As a division of an energy company whose other components dwarfed its size, we didn't have a lot of details on their operations. We still don't have much, but Crown Castle expects a gross margin contribution of $105-110M and $15-20M of G&A expenses in the first year it owns the company. They expect to close the deal in the first half of 2017.