Crown Castle Announces Acquisition of Quanta Fiber

Monday, June 1, 2015 at 4:59PM
Jared Taylor in Crown Castle, Deal Advisor, Deals: Fiber Network, Quanta Fiber, Quanta Services, Sunesys

On Thursday, April 30^th wireless tower company Crown Castle (NYSE: CCI) announced that it had acquired Quanta Fiber Networks, Inc., also referred to as Sunesys, a subsidiary of Quanta Services Inc. (NYSE: PWR).  The transaction is for approximately $1.0 billion and could bode well for Crown Castle, which is trying to increase its fiber network. 

 

Valuation Analysis and Deal Metrics  

 Transaction Facts

• The deal will be financed through approximately $1.0 billion in cash.
• Expected to close by the end of 2015. 

Strategic Considerations

• Before the transaction, Crown Castle leased approximately 1,000 miles of fiber from Sunesys. 
• Transaction should strengthen Crown Castle’s small cell networks. 
• Sunesys has the rights or owns approximately 10,000 miles of fiber in major markets spread throughout the U.S.
• Transaction gives Crown Castle access to a fiber network that includes cities, such as Philadelphia, Atlanta, Chicago, Silicon Valley, as well as northern New Jersey.
• After the acquisition closes, Crown Castle will own or have rights to over 16,000 miles of fiber. 

JSICA’s Take

• Overall, the multiples for the transaction seem to be relatively higher than past transactions in this industry over the last few years.
• The deal provides significant lease-up potential in major metro markets, such as Southern California and Philadelphia. 
• The current acquisition and Crown Castle’s previous acquisition of 24/7 Mid-Atlantic in September 2014 should help add to the firm’s total fiber miles and promote further growth for the company in the industry. 

Article originally appeared on JSI Capital Advisors (http://jsicapitaladvisors.com/).