American Tower has agreed to pay $811 million to purchase more than 4,000 mobile towers from NII Holdings in Brazil and Mexico.
NII Holdings, which provides mobile communication services under the Nextel brand in Latin America, will sell 2,790 towers in Brazil for $413 million and 1,666 towers in Mexico for $398 million.
Nextel Brazil and Nextel Mexico will lease back the towers from American Tower for a minimum 12 year initial lease term.
NII Holdings will use the cash from selling the towers to improve its liquidity position and fund next-generation network deployments in Brazil and Mexico, markets which it believes “offer the best opportunity for value creation and long-term growth and profitability”.
“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, CEO of NII Holdings.
American Tower expects the towers — which are located in and around major population areas and highways — to generate around $149 million in annual run rate revenue. It plans to invest around $50 million in start-up capital expenditure on the two tower portfolios.
“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,” said American Tower CEO Jim Taiclet.
American Tower owns and operates more than 56,000 communications sites in the US, Brazil, Chile, Colombia, Germany, Ghana, India, Mexico, Peru, South Africa and Uganda.
The transactions are subject to regulatory approval, with initial closings expected to be completed in the fourth quarter.