Sep. 8, 2013, 11:10 PM
- "We're more skeptical than ever," writes Muddy Waters, surprising no one by maintaining its Strong Sell on American Tower (AMT) following the purchase of Global Tower Partners.
- The $4.8B price tag is "astoundingly expensive" at about 19x 2014 EBITDA, says the research firm, questioning how management will be able to keep its promise to rapidly de-lever after paying so much.
- "We always think about possible ulterior motivations ... Might AMT management, which certainly has a record of being less than transparent about its overseas business, be desperate to augment its tower base by 25% in order to obscure [slowing] organic growth going forward, and to maintain the optics of 20% dividend growth at any cost?"
- Previous: In mid-July, Muddy Waters issues its initial Strong Sell and $44 PT on American Tower - AMT was at about $74 per share then; it closed at $71.91 on Friday after a post-deal 4.6% gain.
Sep. 6, 2013, 10:15 AM
- SBA (SBAC +2.1%) and Crown Castle (CCI +3.2%) have joined American Tower (AMT +4.4%) in rallying following news AMT is acquiring giant private cell tower owner Global Tower Partners for $4.8B ($3.3B in cash + the assumption of $1.5B in debt).
- The WSJ reported a month ago Global Tower, controlled by a REIT managed by Macquarie, was being shopped. The company owns 5.4K U.S. towers and 500 Costa Rican sites, and also has management rights to 9K+ U.S. sites (mostly rooftop assets) and property interests in another 800.
- The deal is expected to close in Q4, and will increase the size of AMT's debt load to $10.3B (offset by just $1B in cash/investments). The announcement comes a month after AMT announced an $811M Mexican/Brazilian tower purchase/lease-back deal with NII Holdings (NIHD +1.4%), and 10 months after it reached a deal to buy 2K German cell sites from KPN for $502M. NII has additional tower assets that could be on the block.
- In July, Muddy Waters criticized the accounting behind an earlier Brazilian tower purchase by AMT. The company strongly refuted Muddy Waters' claims.
Sep. 6, 2013, 8:23 AM
- American Tower (AMT) announces it struck a deal to acquire Global Tower Partners through its parent company for $4.8B - consisting of cash and the assumption of debt.
- The company says it sees the deal adding $345M in 2014 revenue and $270M in gross margin to its portfolio and being immediately accretive to the firm's results.
- AMT +3.3% premarket.
Aug. 9, 2013, 1:54 PM
- NII Holdings (NIHD +1.1%) enters into a sale/leaseback agreement with American Tower (AMT +2%). The former will sell 2,790 towers in Brazil and 1,666 towers in Mexico to the latter for $811M and sign a minimum 12-year lease agreement with the option to renew.
- The sale of 4,000 of the towers will close in Q4.
- The transaction will boost NII's liquidity. The Latin American carrier had $5.7B+ in debt on its balance sheet as of June 30, and nearly $1.8B in cash/investments.
- NII will account for the newly-leased towers as capital leases, and expects the transactions to have a positive impact on OIBDA.
- The company has now executed on its two liquidity initiatives (outlined in the Q4 CC). The other initiative, a $700M debt refinancing deal, took place in May.
Aug. 8, 2013, 7:45 PM
- Goldman strategist David Kostin has identified what he thinks are the top 40 most undervalued stocks; at the time he issued the note yesterday, each stock had at least 20% upside to his price target.
- The list: MPC, ADSK, VTR, CRM, AMT, SPG, HAL, DVN, EXPE, SWN, R, ESV, BRCM, CAM, NBL, WYNN, WYN, NE, VMC, PSX, NBR, CCI, APC, EL, NFX, FSLR, GM, YHOO, CERN, EOG, CTSH, GT, QCOM, MON, VLO, SLB, PCP, AMAT, BMY, NOV.
Aug. 6, 2013, 10:36 PM
- The WSJ reports private cell tower owner Global Tower Partners "is being shopped to larger rivals." Analysts think the company could fetch $4B.
- Global Tower, owned by funds managed by Australian i-bank Macquarie, owns/operates/leases 16K cell sites, 6.4K of which are in the U.S., Mexico, and Costa Rica.
- Publicly-traded tower owners American Tower (AMT - $27.8B market cap), Crown Castle (CCI - $20.5B), and SBA (SBAC - $9.5B) have all shown a willingness to grow their footprints via M&A (I, II, III).
- The recent performance of their shares could make a deal easier to come by. Likewise, the higher valuations being assigned to tower owners (fueled by expectations 4G investments/mobile traffic growth will keep demand strong) could be motivating Macquarie to put Global Tower on sale.
Jul. 31, 2013, 12:05 AM| Comment!
Jul. 30, 2013, 5:30 PM| Comment!
Jul. 17, 2013, 6:34 PMAmerican Tower (AMT) says it "disputes a number of statements" in Muddy Waters' report, and provides some details about its 2011 purchase of 666 Brazilian towers. AMT, accused by Muddy Waters of paying $250M less for the towers than claimed, says it paid a full $585M for them via $335M in intercompany loans, $184M in equity contributions, and cash from operations. The company adds it "retained an internationally-recognized accounting firm to assist in the purchase price allocation of the acquisition" (8-K) | 2 Comments
Jul. 17, 2013, 10:35 AMMuddy Waters releases its rumored report on American Tower (AMT -2.4%), declaring the cell tower owner a Strong Sell and setting a $44.57 PT. The firm accuses AMT of overstating the price it paid for 666 Brazilian towers by $250M (citing sources and financial documents), makes note of insider selling and perceived corporate governance issues, and deems the rise of carrier Wi-Fi and small cell networks a threat to tower growth. Also, AMT's international ops are accused of overvaluing assets, and of overpaying for towers in exchange for excess rent payments (an arrangement deemed a de facto loan). CCI -1.4%. SBAC -0.8%. (slides - .ppt) | 5 Comments
Jul. 17, 2013, 9:14 AM
Jul. 15, 2013, 10:00 AMA roundup of tech analyst ratings changes: 1) Qualcomm (QCOM -1.6%) has been cut to Neutral by Lazard. 2) NetApp (NTAP +2.6%) has been upgraded to Overweight by Morgan Stanley. 3) ExOne (XONE -5.8%) has been cut to Hold by BB&T. 4) AppliedMicro (AMCC +13.2%) has been upgraded to Strong Buy by Raymond James. 5) Portugal Telecom (PT -2.8%) has been cut to Underperform by BNP Paribas. 6) eGain (EGAN +2.8%) has been started at Outperform by Northland. 7) Himax (HIMX +2.1%) has been started at Buy by Craig-Hallum. 8) American Tower (AMT -1.4%) has been cut to Neutral by ISI. 9) QLogic (QLGC -3.8%) has been cut to Underweight by Morgan Stanley. 10) Linear (LLTC -1%) has been cut to Neutral by Credit Suisse. | Comment!
May 28, 2013, 6:51 PMTalks with Cisco (CSCO) customers and rivals at the CTIA trade show reinforced Pac Crest's view the networking giant's software M&A binge leave it well-positioned to help major carriers "automate, orchestrate and virtualize different physical elements of the network." The firm adds that while overall carrier capex is mixed, "pockets of growth" are being found in the U.S. Cisco managed to see 8% Y/Y carrier order growth in FQ3, a likely sign of share gains. Meanwhile, both Stifel and Pac Crest see SBA (SBAC) as a beneficiary of strong cell tower leasing activity from U.S. carriers. The firms also see small cell deployments giving a lift SBA and its rivals (AMT, CCI). (CSCO acquisitions: I, II, III) | Comment!
May 21, 2013, 9:50 AM
May 17, 2013, 9:10 AMLeap Wireless (LEAP) -2.5% after Barclays starts coverage with an Underweight and $4 PT as part of a broader coverage launch of U.S. telecom service providers. Tower owners SBA (SBAC) and American Tower (AMT) have been started at Overweight, and so has Verizon (VZ). AT&T (T) and T-Mobile USA (TMUS) have been started at Equal Weight. | Comment!
May 1, 2013, 7:07 AM
AMT vs. ETF Alternatives
American Tower Corp is an owner, operator and developer of wireless and broadcast communications real estate. The Company's main business is leasing antenna space on multi-tenant communications sites to different providers.
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