SBA Communications to buy tower sites for $1.45 billion

By Supantha Mukherjee

(Reuters) - Cellphone tower operator SBA Communications Corp will buy 3,252 tower sites in the United States and Puerto Rico from privately held TowerCo for about $1.45 billion to take advantage of explosive growth in data traffic from users of mobile devices such as Apple Inc's iPhone and iPad.

SBA, which has a market value of $6.64 billion, is the smallest of the three major U.S. tower companies but it is growing quickly as competition among existing participants is limited and entry barriers are high.

The purchase, for $1.2 billion in cash and 4.6 million SBA shares, will boost SBA's tower count to more than 15,000.

SBA said the deal would immediately add to adjusted funds from operations after it closes in the fourth quarter.

"We expect the TowerCo assets will produce about $155 million to $160 million in leasing revenue and $93 million to $95 million tower cash flow for the calendar year 2013," Chief Financial Officer Brendan Cavanagh said in a conference call.

A tower can host antennas for multiple operators, resulting in lower costs for clients and more profit for the tower owner.

"We believe the TowerCo assets are high quality, well located and have ample capacity for additional tenants," SBA Chief Executive Jeffrey Stoops said in a statement.

Stoops noted that "a fair amount" of TowerCo's revenue comes from Sprint Nextel's Integrated Digital Enhanced Network (iDen), which the No. 3 U.S. mobile provider is in the process of decommissioning but that this was not a major concern.