CCI Speaks Out About Sunesys

Yesterday, at the same JPMorgan conference, Jay Brown, CFO at Crown Castle, spoke about their acquisition of Sunesys for the first time publicly. The agreement was announced April 30, and CCI will pay approximately $1 billion for the fiber services provider who owns or has rights to nearly 10,000 miles of fiber. Jennifer Fritzsche, Senior Analyst at Wells Fargo, explained, “This was first time CCI management publically spoke on the recent announcement to acquire Sunesys. Sunesys brings with it 10,000 dark fiber route miles and line of site to 3,500 small cell nodes. CCI expects it to contribute $60-65M to AFFO [adjusted funds from operations] at close.  Over the past three years, CCI had invested $1.7 billion in small cells and has grown from 4% to 7% yield, or 1% per year (vs. macro sites of 0.5% yield per year). To date (ex Sunesys), CCI had owned 7,000 route miles (85% owned and 15% long-term IRUs), which generate $140M contribution to gross margin. Interestingly, Brown noted if CCI can replicate this to Sunesys’ 10,000 fiber would be a 20% yield on invested capital.”