Wireless carriers value suppliers who can offer a full suite of solutions and who have deployment expertise. Companies that supply and deploy wireless infrastructure are responding to this demand by teaming up, hoping to gain market share and create scale that will help them with their own suppliers.
Below is a recap of this year’s biggest infrastructure mergers as well as a few key facts about each deal. For more on the impact of consolidation in this industry download our complimentary feature report and webinar.
Major 2015 deals:
1. Nokia puts in $16.6 billion offer for Alcatel-Lucent. The combination would create a network equipment giant with more than $27 billion in revenue and more than 100,000 employees if there are no cuts. The two companies are both top-tier manufacturers of radio access network equipment and both have considerable intellectual property. The combined company would be a formidable competitor to the industry’s largest players, Ericsson and Huawei.
The deal is expected to close this year. European and U.S. regulators have already given their approval, and Nokia just announced a deal with the Chinese government that could expedite Chinese approval for the deal.
2. CommScope has purchased TE Connectivity’s telecom, enterprise and wireless business units. CommScope and TE Connectivity are both leading suppliers of distributed antenna system equipment. CommScope, already ranked as the No. 1 vendor in this market, becomes a dominant player with the purchase of TE Connectivity’s DAS business. It also gains access to TE Connectivity’s digital DAS solution, which has been endorsed by AT&T.
The $3 billion deal gives CommScope greater geographic reach and thousands of new employees, boosting CommScope’s total headcount to 25,000. CommScope expects the merger to create more than $150 million in annual synergies by 2018, including more than $50 million in 2016.
3. Digital Bridge acquires ExteNet Systems. Digital Bridge and its equity partner are investing more than $1 billion in one of the largest providers of so-called “neutral host” DAS and small cell solutions. Neutral-host providers build and operate wireless infrastructure and rent space to the wireless carriers. ExteNet Systems has been a leader in DAS and outdoor small cell deployments. Tower giant SBA Communications was an early investor in ExteNet, but sold its stake to Digital Bridge, which also owns a large number of cell towers through its Vertical Bridge subsidiary. Vertical Bridge has also been very acquisitive this year, purchasing towers from IHeart Media, CiG Wireless, U.S. Cellular and Townsquare Media.
4. Corning purchased IBWave. IBwave Solutions makes software for designing, tracking and reporting on in-building wireless systems. The Canadian company offers the certifications that are often required by vendors, integrators and installers when they hire individuals to work on in-building systems. IBWave integrates equipment from numerous vendors, including Corning, into its curriculum and certification. Corning runs IBWave as a separate business, and IBWave maintains its relationships with Corning’s competitors. The companies did not disclose the purchase price when they announced the deal last spring.
5. Velocitel bought FDH and Stainless LLC. FDH was by far the larger deal, and after the transaction closed Velocitel changed its name to FDH Velocitel. In 2014 Velocitel brought on new CEO Kevin Hostetler, who has a strong M&A track record. Velocitel Chairman Jim Estes remains highly involved with the company. Estes said Velocitel chose FDH largely because of its expertise in tower modification.
6. Carriers sold their towers. Following AT&T’s 2013 sale of its tower rights to Crown Castle for $4.8 billion, Verizon Wireless sold its tower rights to American Tower this year for $5 billion. As towers move from carriers to tower companies, they become available for co-location, meaning that more than one carrier’s radios can be on the tower.
2014 deals:
1. Nokia bought SAC Wireless. When wireless carriers purchase equipment from Nokia they often tap the company’s services division to deploy that equipment. Nokia, in turn, often turns to subcontractors, but last year the company decided that it needed more “self-performance” capabilities. Nokia purchased SAC Wireless, a site acquisition and construction firm based in Illinois. In the year since that deal closed, SAC has been hiring aggressively, even as some of its competitors were forced to cut jobs.
2. MasTec bought Dynis and WesTower. Construction giant MasTec has been a major acquirer of smaller contractors, according to industry sources. Two of its biggest acquisitions have been Dynis and WesTower. MasTec paid $200 million for WesTower, and did not disclose the price it paid for Dynis.
3. Jacobs Engineering bought FMHC. Jacobs Engineering is an infrastructure services firm based in Southern California, and FMHC offers similar services out of the Chicago area. Jacobs said the acquisition increased its geographic reach and brought new competencies to the firm.
