Little Rock, Arkansas-based Communications Sales and Leasing, a telecom infrastructure-specific real estate investment trust, late last week purchased fiber-to-the-tower provider PEG Bandwidth for $409 million.
Dallas-based PEG Bandwidth in Jan. 2015 fired up fiber backhaul services to its 2,000th cell site since activating the first location in March 2010. CS&L currently owns 3.5 million fiber strand miles, 235,000 route miles of copper and other property across 29 states.
“PEG Bandwidth is a compelling and strategic acquisition for CS&L with a rich fiber-to-the-tower network, respected management team, and strong customer relationships with over 80% of revenues from the largest wireless carriers,” said Kenny Gunderman, president and CEO of CS&L. “PEG will provide us a high growth operating platform as we continue to build a fiber rich REIT focused on acquiring and constructing mission critical communication infrastructure assets.”
Telecom financing firm Associated Partners helped put the deal together. The purchase price includes $315 million in cash, 1 million shares of common stock and 87,500 shares of preferred stock
“CS&L is a great partner as PEG continues to grow and diversify its business, and we are thrilled to have a continuing equity interest in CS&L given our assessment of their future prospects,” said Scott Bruce, managing director at Associated Partners.
The deal needs regulatory approval and is expected to close in April.
PEG Bandwidth designs, builds and operates Ethernet backhaul networks connecting wireless communications towers to the data fiber backbone, principally in rural geographies. The company, which received $15 million in equity financing from Associated Partners in 2010, in 2013 closed on the acquisition of Contact Network’s broadband operations, which operated under the InLine brand in parts of Mississippi and Alabama.
At the time of acquisition, the PEG portfolio included more than 300,000 strand miles in the Northeast, mid-Atlantic, Illinois and South Central parts of the United Staes.
