American Tower Corp., the biggest operator of cellular towers in the U.S., agreed to acquire the parent company of rival Global Tower Partners for about $3.3 billion, adding thousands of wireless sites to its holdings.
American Tower is buying MIP Tower Holdings LLC, a closely held real estate investment trust that owns Global Tower Partners and related companies, according to a statement today. The deal brings American Tower about 5,400 U.S. towers and the management rights to more than 9,000 additional sites. Including debt, the purchase price is about $4.8 billion.
The acquisition continues a trend of consolidation in the tower industry, with a dwindling number of companies controlling vast swaths of wireless infrastructure. American Tower agreed last month to buy almost 4,500 wireless sites from NII Holdings Inc. in Brazil and Mexico for a total of $811 million.
“GTP has constructed and acquired an outstanding U.S. portfolio of tower, rooftop and land assets, which is highly complementary to that of American Tower,” Jim Taiclet, chief executive officer of Boston-based American Tower, said in the statement. “GTP’s management of these assets has been excellent.”
The acquisition, slated to be completed in the fourth quarter, will generate about $345 million in revenue and $270 million in gross profit next year, American Tower said. Goldman Sachs Group Inc. and EA Markets Securities LLC served as American Tower’s financial advisers, with Clifford Chance US LLP and Sullivan & Worcester LLP offering legal counsel. Global Tower Partners was advised by Deutsche Bank AG.
American Tower shares climbed 4.4 percent to $71.74 at 9:44 a.m. in New York. The stock had declined 11 percent this year through yesterday.
The additional towers will help the company keep up with the shift to fourth-generation networks, American Tower said. The four largest U.S. carriers -- all of which are American Tower customers -- are upgrading their systems to a standard called long-term evolution, or LTE, giving users faster access to video and the Web.
American Tower and chief rival Crown Castle International Corp. are playing an increasingly vital role in the wireless industry, with many carriers selling off their towers to the companies and leasing them back. American Tower, which already had about 56,000 towers in its portfolio before today’s transaction, also makes deals with landowners to put cell sites on their land. The infrastructure lets mobile-phone customers place calls and connect to the Internet.
In addition to the domestic towers, the Global Tower deal also will bring 500 communications sites in Costa Rica, American Tower said.