International Spending Spree Pays Off

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American Tower received a lot of attention after back-to-back announcements of international acquisitions. Last week, AMT followed up its $1.2 billion purchase of 6,480 Brazilian towers from TIM Celular S.A. with a $1.05 billion purchase from Bharti Airtel Limited in Nigeria. These two purchases did wonders for the company’s stock. Market Insider reported that shares of AMT rose by 3.96% during the week November 24 and 5.87% for the past 4 weeks. The stock also reached a new 52-week high of $104.46 on November 26. “The back-to-back acquisitions will also support the company’s plan of owning more than 70,000 towers by the end of 2014, through organic or inorganic growth. Moreover, the company intends to exceed 2,000 domestic leases this year in addition to spending $110 million in land acquisitions. American Tower is confident such strength in its tower portfolio will help it double its AFFO per share by 2017,” analysts at Zacks explained. Bill Stoller of Benzinga, a financial media outlet, noted that AMT EVP of International Operations Hal Hess explained the three broad requirements the company uses to evaluate markets before entering into a new marketplace, “1. A stable political and positive economic environment. 2. A dynamic wireless market — at least three to four carriers. 3. The terms of the specific transaction, including assessment of counterparty risks.” Nigeria might be a new marketplace for the company, but they are well-versed in the African tower industry owning towers in Ghana, South Africa, and Uganda. Operating these structures in Africa can be challenging with the difficult terrain, quality of electrical power, and incomplete road networks. But with mobile demand increasing across the globe, the need for towers continues to grow, and this demand drives the company’s revenue higher.

It’s also been rumored that American Tower’s spending spree isn’t over. Back in September, the company was reportedly in talks with Viom Networks to buy a significant stake in the company. This week, The Economic Times of India reported American Tower Corporation is close to finishing this deal rumored to be around $900 million to $1 billion where ATC would acquire a 51% stake in Viom Networks. The second phase of this deal will possibly see ATC merge its India portfolio of 12,000 towers with Viom’s 42,000 towers.

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