Target: Tarpon Towers LLC
Price: $45 million
Sponsor: ABS Capital Partners
Legal Adviser: Sponsor: Hogan & Hartson
The deal is intended to help the Sarasota, Fla.-based company branch further outside of its Florida base to build and buy towers along the East Coast, Deric Emry, a partner with ABS Capital, told Buyouts. The company, which also owns towers in Connecticut and California, is currently negotiating possible deals with management of potential acquisition targets. ABS Capital invested $25 million of equity and procured an additional $20 million in senior debt from Regions Bank in Arkansas to get the deal done.
Emry said he believes many of the industry trends that drew the firm in the late 1990s to SBA Communications, a Boca Raton, Fla.-based owner-operator of telecommunications infrastructure, are still evident today. For example, companies such as AT&T are expanding their networks to meet customer demand, he said. Meanwhile, total minutes used by wireless phones grew about 15 percent to more than 2 trillion in 2008, according to wireless industry estimates. Those types of trends are expected to continue as more people substitute wireless phones for landline connections.
At the same time, valuations for these types of companies, which were high when credit was available, have been falling, Emry said. ABS Capital earned a 10x return on capital when it exited SBA in 2000.
Executives at ABS Capital also have experience with the management team at Tarpon: CEO Ronald Bizick was previously COO of SBA Communications and COO of Global Signal Inc., another former portfolio company of ABS Capital that was sold to Crown Communications in 2006. William Freeman, the company’s president, was formerly the CFO of Global Signal and System One Services Inc., also a former ABS Capital portfolio company.
The investment in Tarpon Towers comes from