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American Tower Paying $1.2 Billion for Brazilian Tower Network

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American Tower has reached an agreement with TIM Celular to acquire two portfolios of towers in Brazil.

The first portfolio includes approximately 5,240 towers. The second portfolio includes approximately 1,240 towers, which are subject to certain preemptive acquisition rights held by third parties. The total consideration is expected to be approximately USD1.2 billion, subject to customary adjustments.

American Tower said that it intends to finance the acquisition in a manner consistent with its previously announced leverage targets.

American Tower anticipates that the towers will generate approximately 435 million Brazilian Reais (approximately $171 million at the current exchange rate) in annual run rate revenues (which includes ground rent pass-through and existing collocation revenue), and approximately 191 million Brazilian Reais (approximately $75 million at the current exchange rate) in annual gross margin.

TIM will be the anchor tenant on each portfolio under leases with 20-year initial terms.

The transactions are expected to close in the first half of 2015, subject to customary closing conditions, regulatory approval and for the second portfolio, expiration of the third parties' preemptive rights.

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