BOCA RATON, Fla., March 18 /PRNewswire-FirstCall/ --
SBA Communications Corporation (Nasdaq: SBAC) ("SBA" or the "Company")
announced today that certain of its subsidiaries have entered into a
definitive agreement to sell to AAT Communications Corp. ("AAT") 679 towers
or, at the election of AAT, 801 towers, for a purchase price of $160 million
or $203 million, respectively, subject to adjustment in certain circumstances
(the "Transaction"). The towers comprise substantially all of SBA's tower
assets in the Western United States, including Michigan, Wisconsin, Iowa,
Missouri, part of Illinois, Oklahoma and most of Texas. The Transaction is
expected to close in stages commencing May 9, 2003 and ending September 30,
2003. The purchase price shall be paid in cash and substantially all of the
net proceeds from the Transaction are anticipated to be used by SBA to reduce
indebtedness. The Transaction is subject to a number of conditions, including
an amendment to the existing senior credit facility of SBA Telecommunications,
Inc. to modify certain financial covenants, among other items. In the fourth
quarter of 2002, the 801 towers contributed approximately $3.9 million of site
leasing gross profit (tower cash flow) to SBA's financial results. At
December 31, 2002 such towers had run-rate annualized tower cash flow of
approximately $17.8 million as reported on an operational basis, including all
signed leases as of such date some of which had not begun to accrue revenue
for financial statement purposes. Pro forma for the Transaction and the sale
of 801 towers, SBA would own 3,076 towers.
"In the fourth quarter, we began actively exploring alternatives to
improve our balance sheet and stabilize our liquidity position," commented
Jeffrey A. Stoops, SBA's President and Chief Executive Officer. "We explored
various options to accomplish those goals, and we determined that the quality
of our towers afforded us attractive opportunities to sell some of our assets
and reduce debt. This Transaction accomplishes our goals, and we believe it
evidences both the quality of our portfolio and the long-term attractiveness
of our business. The net proceeds from the Transaction with AAT will reduce
our absolute debt and pro forma net debt leverage ratio, and stabilize our
liquidity position long-term through the amendment to our credit facility,
which amendment is a condition to closing the sale. In addition, we expect
improved operating efficiencies and reduced overhead costs to result from the
Transaction as we focus our future tower ownership activities in the eastern
third of the U.S. where the remaining approximately 80% of our towers are
located. With the closing of this Transaction and the improvements to our
balance sheet and liquidity, we believe we will be on a solid path to produce
continued attractive same tower revenue and cash flow growth, increasing
EBITDA and, ultimately, positive free cash flow."
"We are delighted about the agreement reached with SBA to acquire these
towers, which are a great compliment to our current portfolio," said Jerald L.
Kent, Chief Executive Officer of both AAT Communications and Cequel III, LLC,
the St. Louis-based management company that oversees AAT's operations in
conjunction with that company's executive team in Iselin, New Jersey. "When
Cequel III teamed up with Charterhouse Group International and AAT
Communications last year, we collectively agreed that we wanted to reach
critical mass in two years. With this agreement, we will achieve that in one
year."
SBA will provide more information about the Transaction in its conference
call to discuss its fourth quarter results, scheduled for March 25, 2003 at
10:00 a.m. Dial-in number: 800-851-3058. Conference call name: "SBA 2002 4th
Quarter Results," Replay: March 25, 2003 at 5:00 p.m. to April 8, 2003 at
11:59 p.m. Replay number: 800-642-1687, Access code: 7656254. Internet
access: www.sbasite.com.
SBA is a leading independent owner and operator of wireless communications
infrastructure in the United States. SBA generates revenue from two primary
businesses -- site leasing and site development services. The primary focus
of the company is the leasing of antenna space on its multi-tenant towers to a
variety of wireless service providers under long-term lease contracts. Since
it was founded in 1989, SBA has participated in the development of over
20,000 antenna sites in the United States.
Before pending acquisitions, AAT Communications Corp. owns and/or manages
more than 6,000 tower sites across the United States, leasing space for
wireless voice and data services to a broad tenant base. The company also has
management contracts with a long list of clients, including Union Pacific,
Norfolk Southern, and the State of Michigan. In addition to site acquisition
and management, AAT is a leader in collocation and technical support services.
Cequel III, LLC. is a privately held management company, which, in
addition to AAT Communications, oversees a number of growth-oriented firms in
the telecommunications and cable industries. In February, Cequel III assumed
management responsibilities for Classic Communications, the nation's
12th-largest cable operator. Also in February, Cequel III announced
agreements, pending customary closing conditions and regulatory approvals, to
purchase several Houston-area cable systems from Shaw Communications Inc.; and
to co-establish C III Communications, LLC, which will acquire and manage the
assets of Broadwing Communications Services, Inc., the broadband subsidiary of
Cincinnati-based Broadwing Inc.
For additional information about SBA, please contact Pamela J. Kline, Vice
President, Capital Markets, at (561) 995-7670.
This press release includes forward looking statements, including (i) the
Company's expectations regarding the total number of towers that will be sold,
the final purchase price and the proceeds; (ii) the Company's expectations
that the Company and AAT will satisfy all closing conditions, including the
Company's ability to amend its existing senior credit facility; (iii) the
Company's expectations regarding the consummation of the closing in stages
commencing on May 9, 2003 and ending on September 30, 2003; (iv) the Company's
expectations regarding the effects of the Transaction on its balance sheet and
liquidity position, reduction of its absolute debt and pro forma net debt
leverage ratio, operating efficiencies and overhead costs; (v) the Company's
expectations regarding its ability to continue to achieve attractive same
tower revenue and cash flow growth, increasing EBITDA and positive free cash
flow; and (vi) its intention to focus future tower ownership activities in the
Eastern U.S.
These forward-looking statements may be affected by the risks and
uncertainties in the Company's business. This information is qualified in its
entirety by cautionary statements and risk factor disclosure contained in the
Company's Securities and Exchange Commission filings, including the Company's
report on Form 10-K filed with the Commission on March 21, 2002. The Company
wishes to caution readers that certain important factors may have affected and
could in the future affect the Company's actual results and could cause the
Company's actual results for subsequent periods to differ materially from
those expressed in any forward-looking statement made by or on behalf of the
Company. With respect to the Company's expectations regarding the number of
towers that will be sold, the final purchase price and the net proceeds from
the Transaction, such factors include the decision by AAT to elect to purchase
the final 122 towers, and potential adjustments based on the aggregate tower
cash flow sold as determined by the terms of the purchase agreement. With
respect to other forward looking statements, including statements regarding
the financial impact of the Transaction, such factors include, but are not
limited to, (i) the ability of the Company to satisfy all closing conditions,
including the receipt of the necessary bank consents, consents from third
parties and other customary closing conditions and (ii) any indemnification
obligations that may arise under the agreement. The Company undertakes no
obligation to update forward-looking statements to reflect events or
circumstances after the date hereof.
SOURCE SBA Communications Corporation