Earlier this Summer, American Tower announced that it had reached an agreement with NII Holdings, Inc. to acquire up to 2,790 towers in Brazil and 1,666 towers in Mexico in two separate transactions, for approximately $413 million and $398 million, respectively, based on current foreign currency exchange rates. American Tower expects to use cash on hand and borrowings under its existing revolving credit facilities to fund the acquisition.
The majority of the portfolio consists of towers located in and around major population areas and along major highways. On average, the towers have a tenancy ratio of just over one tenant per tower, providing significant opportunities for future site leasing growth. Nextel Brazil and Nextel Mexico have agreed to leaseback the towers from American Tower for a minimum 12-year initial lease term with additional renewal options thereafter.
Jim Taiclet, Chairman, President and Chief Executive Officer of American Tower, said: “Through this acquisition, American Tower will gain significant incremental scale in our Mexican and Brazilian operations, and we anticipate leveraging the strong demand backdrop in both markets to drive meaningful revenue and cash flow growth for many years to come.”
“We are excited to reach agreement with American Tower and achieve our goal of unlocking the value of a significant portion of our tower assets while raising additional liquidity,” said Steve Shindler, chief executive officer of NII Holdings.
The transactions are subject to regulatory approvals and the initial closing under each transaction is expected to be completed in the fourth quarter of 2013. These initial closings are expected to be followed by subsequent closings of additional tranches of towers as certain closing requirements relating to the remaining tranches are satisfied.