American Tower is expanding its tower portfolio in Brazil with the purchase of more than 6,400 towers from Telecom Italia’s TIM Cellular for roughly $1.2 billion. Of the 6,400-plus towers, 1,240 are subject to certain preemptive acquisition rights held by third parties.
The company expects the new towers to add roughly $171 million a year to its revenue, and $75 million a year to its gross margin. TIM will be the anchor tenant, but American Tower will bring other tenants onto certain towers over time.
This purchase will bring American Tower’s total number of Brazilian towers to more than 18,000. The company has been aggressively building its portfolio through acquisitions, including 4,600 towers acquired through the purchase of BR Towers, and 2,790 towers purchased from NII Holdings.
American Tower is paying roughly $187,000 per tower in this transaction, less than it agreed to pay earlier this year for the BR Towers portfolio. Some of the sites acquired from BR Towers may have already had multiple tenants.
Earlier this year, American Tower said that as of 2013, there were 270 million wireless subscribers in Brazil. Wireless penetration was 136%, indicating that many users have multiple devices. The top four carriers in Brazil are Vivo, TIM, Claro and Oi, and all have started the rollout of 4G technology.
American Tower has been expanding throughout Latin America. In 2012, American Tower purchased 558 towers from Telefónica’s Movistar Chile for $96 million. In late 2011 the company purchased 2,500 towers from Telefónica’s Mexican subsidiary for about $500 million, which followed the acquisition of 2,126 towers from Millicom International Cellular subsidiary Colombia Móvil for $182 million.
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