Wireless tower owner Global Signal Inc., formerly known as Pinnacle Holdings, has returned to the public market with an initial public offering of 7 million shares of common stock priced at $18 per share.
Shares of Global Signal, under the symbol GSL, began trading Thursday, and the IPO is expected to close tomorrow. The stock was trading at $20.23 per share, up about 12 percent from its opening, at press time.
The IPO’s underwriters, represented by Morgan Stanley, Banc of America Securities L.L.C., Lehman Brothers and Raymond James, were also granted an option to purchase up to 1.05 million shares total to cover any over-allotments.
Sarasota, Fla.-based Global Signal, which changed its name from Pinnacle early this year, was founded in 1995 and was forced into bankruptcy in early 2002 after it lost most of its customers with the downturn in the paging and specialized mobile radio industries.
For 2001, the company reported a net loss of $448.2 million, or $9.25 per share, against $190.6 million in revenues. The price of its shares had plummeted to around 6 cents each in the weeks before it entered Chapter 11-bankruptcy protection.
The company emerged from Chapter 11 in late 2002 to operate privately and now counts more than 3,300 tower and rooftop communications sites throughout the United States and Canada in its portfolio.
The offering brings the total number of public tower companies back to five. Although improvement has been evident this year and demand from carriers enhancing network quality has been up, the long-term health of the tower sector remains elusive.
Share prices of the publicly traded tower companies cover a broad range-currently between approximately $4 and $40. SBA Communications Corp. falls shortest at $3.97 per share, with American Tower Corp. at $13.99 per share, Crown Castle International Corp. at $14.45 per share, and SpectraSite Inc. topping the sector with a $41.19-per-share price. SpectraSite has led the other companies since it emerged from bankruptcy in early 2003.
SpectraSite, like Pinnacle, went through Chapter 11, but remained public upon its emergence, which proved positive for its stock valuation. The company’s stock value has soared above its competitors’, and its current 52-week-low is $23.50 per share-well above the others’ 52-week-highs.
SpectraSite last week received accolades from Bear Stearns & Co. Inc. when the analyst firm introduced a new year-end 2005 price target of $51, “based on the company’s strong operating performance in 1Q ’04.” Bear Stearns also reiterated its “outperform” rating on the company.
SBA, at the other extreme, has spent the past year paring to a core focus, which appears to be tower ownership in the eastern United States. The company shed its western tower assets during the third quarter of 2003 and in recent months also sold its western tower services division.
Focusing on the eastern third of the United States was a strategic decision, according to SBA. “This is the area where we have had the most experience as a company,” Jeff Stoops, SBA’s president and chief executive officer, said at last week’s Friedman Billing Ramsey analyst conference.
In addition, according to Stoops, this is where SBA has seen the highest rents, highest margins on towers and greatest volumes of leasing activity. In fact, after selling its 800-tower-strong western portfolio, “our pro forma statistics on lease-up rates and margins and revenue per tower actually increased pretty dramatically,” Stoops added.
During this year, SBA has also put into play several transactions to reduce debt on its credit facilities. However, although the company’s stock has fluctuated since the beginning of the year, it has not broken the $5-per-share mark since January.
The company recently hired Anthony Macaione to serve as senior vice president and chief financial officer.
