In February, Cumulus Media said that the company was considering selling its tower portfolio of 250 sites across 32 states to increase its liquidity and pay down debt. On Friday, the deal was inked with Vertical Bridge picking up the assets for $213 million.
Previously, CFO John Abbot said that he believes that the multiples being paid as the tower industry gears up for 5G are “well in excess” of the 6-to-8 times multiples that were commonplace for radio station sales.
Crown Castle, American Tower and SBA Communications reportedly looked at Cumulus’ book and provided proposals, but Vertical Bridge was the successful suitor at a 14.25x multiple.
During their Q2 earnings call it was stated that the deal was a sale of the land and intangibles and a leaseback.
The initial term of each lease would be 10 years, followed by five option periods of five years each.
If Vertical Bridge acquires all of the tower sites that are subject to the transaction, the company would have annual lease payment obligations of approximately $13.5 million.
The first closing of the transaction is expected to occur in the fourth quarter of 2020 following a 45-day diligence period, during which the buyer and/or the company may exclude certain sites from the transaction based upon customary grounds for exclusion.
Vertical Bridge is required to acquire at least 85% of the tower sites.
Last June, Vertical Bridge, the largest private owner and operator of communications infrastructure in the U.S., and a portfolio company of Colony Capital, announced it had reached its goal of becoming 100% carbon neutral, the only tower company in the world to achieve that goal.
Colony Capital President and CEO Marc Ganzi on Friday lauded the cell tower REIT: “At the end of the day, it’s more than just pages — words on a page. It’s about putting this into action, and delivering results for our shareholders.”
He also touted Colony’s stock price, stating that at sub $2.00 it was a wise investment.