Crown Castle to Acquire Lightower

July 19th, 2017 by · 17 Comments

I was on the road yesterday travelling up I-95 from Florida to NJ, so of course that’s when the long-awaited Crown Castle deal came down at last.  And so it has happened, Lightower Fiber Networks has agreed to be acquired by Crown Castle International for $7.1B in cash.

Lightower’s 33K or so route miles of fiber will join Crown Castle’s other big fiber purchases – Sunesys, FPL Fibernet, Wilcon, 24/7 Fiber Network – in what is a growing national fiber footprint of some 60,000 route miles.  The metro footprint now covers 23 of the 25 largest US markets, and will be a key piece of Crown Castle’s growing small cell expansion.

The deal is expected to be immediately accretive to AFFO per share.  After the close they expect to boost the annual common stock dividend rate by $0.15-0.20 per share  and are increasing the long term annual dividend growth target from 7% to 8%.  Crown Castle has commitments from Morgan Stanley and BofA Merrill Lynch to help finance the purchase.

Lightower is expected to contribute $850-870M in revenue during the first full year, with $510-530MM in adjusted EBITDA.  For those counting, that multiple works out to a multiple of about 13.6 give or take.

We have gone a long way in the wireless backhaul business.  At one point, wireless backhaul was a fools errand that the economics didn’t support.  Now we have a tower REIT spending a big multiple to acquire Lightower primarily for the potential it has in that area, with the announcement barely mentioning the enterprise and government verticals and not even saying “data center”.

When Crown first bought 24/7 Fiber a few years back, I wasn’t sure they meant it.  They clearly do now though.  Some speculation is rising that Zayo will be next.  I don’t see that as a near term thing, but I can’t discount the possible eventuality.  I do wonder if the other tower companies might finally sit up and take note of what Crown Castle is doing as well.

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Categories: Mergers and Acquisitions · Metro fiber

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17 Comments So Far

  • Anonymous says:

    You know your industry sucks when the only news anyone gets excited about is which half-wit company is buying which other half-wit company.

  • Anonymous says:

    Not good for either company or the industry

    • Billy says:

      Please explain how this is not good for either company? It makes sense from a small cell / DAS perspective, as well as an enterprise perspective. The only major overlap is in Philadelphia.

    • Anonymous says:

      To Billy Says..,,

      All have answered for me, where do you see a positive response from

      • Billy says:

        It was inevitable that LT was going to be acquired. Of all of the bidders (CL, Zayo, Altice, Uniti Group, American Tower, Comcast, etc), CCI is one of the most complimentary. Not ideal, but it could have been worse for LT employees & customers.

        But what do I know.

  • mhammett says:

    This is not good for anyone that’s a customer of Lightower. Crown Castle is a terrible company.

  • There isn’t an acquisition that has resulted in a better service provider. Bigger is never better.

    • Anonymous says:

      exactly. It might be better for some investors, but there is nothing to be gained for customers or innovation, betterment of the industry by any of these.

      Giving the impression of growth by periodically gobbling up some assets and firing a few people does not a healthy industry make.

  • Amope says:

    Guess we know who the Lightower employee is

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