Thursday, December 15, 2011

Crown Castle Expands to Small Cell and DAS with NextG Acquisition

Crown Castle International agreed to acquire NextG Networks for approximately $1.0 billion in cash. Crown Castle expects to fund the acquisition with debt financing. NextG is owned by a group of investors led by Madison Dearborn Partners and including Accel Partners, Redpoint Ventures and Meritech Capital Partners.

NextG, which specializes in outdoor distributed antenna systems ("DAS"), currently has over 7,000 nodes-on-air and a further 1,500 nodes under construction. In addition, NextG has rights to over 4,600 miles of fiber. Over 90% of NextG nodes are in urban and suburban locations, with 80% in the top ten US metropolitan areas, including New York, Los Angeles, Chicago and Dallas Fort Worth. The NextG assets are expected to provide significant growth, as they currently average only 1.25 tenants per network.

Following the contemplated acquisition, Crown Castle expects to be the largest independent DAS operator in the US, with approximately 10,000 nodes and 26 venues in operation or under construction.

Currently, Crown Castle owns, operates and manages over 22,000 and approximately 1,600 wireless communication sites in the US and Australia, respectively.

"Increasingly, we believe that small-cell architecture, such as DAS, will be an important complement to traditional macro tower installations," said Ben Moreland, Crown Castle's President and Chief Executive Officer.