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MasTec buys WesTower for $200 million

Consolidation in the wireless infrastructure services space continued this week with MasTec’s purchase of WesTower Communications. Florida-based MasTec said it paid $199 million in cash, or about .45-times projected 2014 revenue, for 100% of WesTower’s equity. Since 2011, WesTower had been owned by Canada’s Exchange Income Corporation.

WesTower and MasTec both build and maintain towers and deploy infrastructure for wireless carriers, and are part of AT&T’s turf vendor program. WesTower recently announced that its contract with AT&T had been renewed for three years starting Sept. 1. The company is active in the northwestern part of the United States, as well as in Alaska.

MasTec has worked closely with AT&T for a number of years, and is a partner in AT&T’s Tower Crew Augmentation Program, through which contractors maintain dedicated tower crews for AT&T. MasTec, a public company, is involved in construction projects outside the wireless industry, also serving the electric utility and energy pipeline industries, reporting total revenue of $1.2 billion last year.

Consolidation of wireless infrastructure service providers is motivated by several factors. Carriers are increasingly interested in working with contractors that can “self-perform” most parts of a project, which encourages companies to acquire skill sets that they may not have in-house. Geographic reach can also help contractors self-perform projects and manage their supply chains, another motivator of mergers and acquisitions. Finally, the inconsistent nature of carrier spending can make it hard for some smaller companies to meet their financial commitments, leading them to seek a partnership with a larger player.

“We are very excited about the geographic expansion, increased market penetration and skilled employee base that WesTower adds to our existing wireless operations,” said MasTec CEO Jose Mas. “We are in a unique position to improve WesTower’s post-acquisition operating results and working capital efficiency.”

MasTec has been acquiring smaller companies for several years, according to industry sources. Less than one year ago MasTec acquired Dynis for an undisclosed amount. Other large acquisitions in the wireless infrastructure services industry include equipment vendor Nokia Network’s recent purchase of SAC Wireless and Jacobs Engineering’s purchase of FMHC.

ABOUT AUTHOR

Martha DeGrassehttp://www.nbreports.com
Martha DeGrasse is the publisher of Network Builder Reports (nbreports.com). At RCR, Martha authored more than 20 in-depth feature reports and more than 2,400 news articles. She also created the Mobile Minute and the 5 Things to Know Today series. Prior to joining RCR Wireless News, Martha produced business and technology news for CNN and Dow Jones in New York and managed the online editorial group at Hoover’s Online before taking a number of years off to be at home when her children were young. Martha is the board president of Austin's Trinity Center and is a member of the Women's Wireless Leadership Forum.

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