Communications Sales & Leasing To Buy Tower Cloud For $230 Million Cash And Stock

Communications Sales & Leasing, Inc CSAL revealed that it reached a definitive agreement to buy privately-held Tower Cloud, Inc. for $230 million in cash and stock. According to the company, Tower Cloud's fiber network currently consists of 90,000 fiber strand miles in service across the southeastern United States, with 181,000 fiber strand miles awarded for future deployment for the major wireless carriers. The transaction is expected to close in the fourth quarter.

As per the terms of the deal, Tower Cloud shareholders would get initial consideration of $230 million, subject to customary closing adjustments. This included $180 million of cash and the issuance of 1.9 million shares of CS&L common stock. Moreover, Tower Cloud shareholders might get additional consideration contingent upon Tower Cloud achieving some defined operational and financial milestones.

Communications Sales & Leasing President and CEO, Kenny Gunderman, said, "Tower Cloud significantly expands our backhaul network and greatly accelerates our entry into the high growth small cell and dark fiber businesses. We continue to grow our wireless carrier relationships across all asset classes and are seeing an increasing number of opportunities arise as carriers densify their networks and look toward the deployment of 5G and related technologies."

The company indicated that the deal offered significant gains including more than 90 percent of Tower Cloud's revenues are from national wireless carriers. The company also expects the acquisition of Tower Cloud advances CS&L's diversification strategy to boost its exposure to the national wireless carriers with long term contractual revenues.

Also, the acquisition would boost its small cell and dark fiber businesses. ower Cloud's recent dark fiber, as well as, small cell awards with national wireless carriers would accelerate its initiatives in this mission critical infrastructure class. The company indicated that tower Cloud is constructing dark fiber routes in Florida and Georgia with total contractual revenues of $175 million.