iHeartMedia today announced a deal to sell an undisclosed group of its radio towers to tower owner Vertical Bridge for up to $400 million. The broadcaster will continue to use the towers in a lease arrangement after the purchase closes, which is expected in the first quarter of 2015. iHeartMedia says the sale will help optimize its balance sheet and maximize liquidity.
Radio giant Clear Channel in September changed its name to iHeartMedia, a brand it has used for its iHeartRadio streaming service. The last data obtained by Wireless Estimator indicated that they had approximately 457 structures. Although they show considerably more structures in their database, the total is increased considerably since many of their AM stations have multiple towers in the array.
Second big deal this month
The deal came on the heels of Vertical Bridge’s announcement last week that they had bought United States Cellular Corporation’s 595 towers for approximately $159 million.
The transaction is expected to close in Q1 2015. There will be no impact on the company’s broadcast capabilities and operations; at closing, the company will enter into a lease with respect to the sold tower assets that will ensure the ability of its broadcast operations to continue without interruption. The company also advised that investors should expect incremental lease expense as a result of the transaction.
“This is a great example of how we continue to optimize our balance sheet and maximize liquidity — and how we continually review our entire portfolio of assets to ensure we operate them in the most efficient way possible and invest our resources in the highest return opportunities,” said Richard J. Bressler, President and Chief Financial Officer of iHeartMedia, Inc.
“We are excited to add this high quality tower portfolio to our existing assets,” said Alexander L. Gellman, CEO of Vertical Bridge Holdings, LLC. “We are looking forward to a strong partnership with iHeartMedia. In addition to being a premier broadcast portfolio, these sites already have many broadband telephony and data tenants and the capacity and potential to add many more. With this latest transaction, Vertical Bridge now has approximately 2,000 revenue-producing sites that are owned or under definitive agreement.”
Strong funding and former GTP execs behind Vertical Bridge
Vertical Bridge recently obtained an additional $750 million in equity commitments. Founded in 2014, the company is a privately-owned tower company headquartered in Boca Raton, Fla. Vertical Bridge was founded in 2014 by Digital Bridge Holdings, LLC as well as certain key executives from Global Tower Partners. Marc Ganzi is CEO of Digital Bridge Holdings.
Bernard Borghei and Michael Belski are both senior vice presidents and co-founders of Vertical Bridge. Prior to forming the tower consolidator, Borghei was the senior vice president of operations at GTP. Belski served as GTP’s senior vice president of leasing and marketing.
Gellman was the chief operations officer and president of GTP where he directed all leasing, build-to-suit, operations, human resources and information technology.