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T-Mobile USA, Crown Castle enter $2.4 billion tower transaction

Written by Andre Yoskowitz (Google+) @ 29 Sep 2012 17:14

T-Mobile USA, Crown Castle enter $2.4 billion tower transaction T-Mobile USA and Crown Castle have entered into a agreement in which Castle will acquire rights to 7200 T-Mobile towers in exchange for $2.4 billion in cash.
Castle can now lease and operate the towers for the next 28 years.

Additionally, Castle will be given the option to purchase the towers at the end of the lease "for aggregate option payments of approximately $2.4 billion, which payments, if exercised would be primarily between 2025 and 2048."

"We are pleased to reach this mutually beneficial agreement with Crown Castle and take another step closer to realizing the bold vision outlined in our Challenger strategy to solidify our competitiveness in the industry by investing in areas where we anticipate the strongest return for our customers," notes John Legere, Chief Executive Officer of T-Mobile USA. "T-Mobile USA is working aggressively to make our 4G network stronger, faster and more dependable for consumers, and this transaction will support our ongoing $4 billion network modernization initiative that is the cornerstone of this effort as we work tirelessly to continue to deliver our amazing 4G services nationwide."

Adds Crown Castle: "We are very pleased with our agreement with T-Mobile, which strengthens our position as the largest provider of shared wireless infrastructure in the US, which we believe is the largest, fastest growing and most profitable wireless market in the world. Consistent with our focus on the top 100 US markets, the T-Mobile towers are similarly well-located, with 83% of the towers in the top 100 markets and 72% located in the top 50 markets. The T-Mobile assets are expected to provide significant growth driven by the continued demand for wireless data services, particularly in the most densely populated areas in the US.

While this transaction increases our tower count by approximately 33%, the transaction consideration represents only approximately 9% of our enterprise value. Further, we expect the impact from the contemplated transaction and related expected debt financing to be accretive to our 2013 adjusted funds from operations per share and approximately 5% accretive to our long-term adjusted funds from operations per share."

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