Invoking the Gods of synergy, Crown Castle Inc. of Houston recently secured a $200 million private equity financing from GE Capital Structured Finance Group of Stamford, Conn.
The financial terms of the convertible preferred equity placement, which is expected to close early next month, include an 8.25% dividend rate and a conversion price of $26.875. The new security has a 12 and one-half year maturity that includes a three-year non-call provision and a declining premium thereafter, said Charles Green, Crown Castle’s chief financial officer. In addition, GE received a five-year warrant for one million shares of common stock that can be exercised at $26.875.
Following the close of the transaction, GE Capital can appoint one director to the Crown Castle board. The investment also contains a two-year restriction on the resale by GE Capital of any of the securities involved.
Lehman Brothers served as Crown Castle’s financial adviser on the transaction, which was structured by the GE structured finance group’s global communications team in conjunction with GE Capital Markets Services.
Green added that the company viewed the investment by GE as equal parts strategic and financial. Financially, this investment allows Crown Castle to consider acquisition opportunities, as well as enhance its operations. In fact, Green said the company will likely make one major acquisition by year end.
Representatives from both groups declined to comment specifically on the strategic implications the deal brought forth. However, Nicole Cawley, managing director at GE said the potential strategic opportunities were the most exciting aspect of the investment.