In a second development this week with implications for the fiber network market, Crown Castle International (CCI) unveiled plans on Tuesday to purchase fiber network services provider FPL Fibernet Holdings, LLC (FibertNet) from its owner, NextEra Energy, for $1.5 billion in cash. As stated in a CCI press release, the proposed transaction would boost the ability of CCI, the largest provider of towers and other shared infrastructure to the U.S. wireless industry, to provide backhaul support for small cells “in markets where we see significant demand from our wireless carrier customers.”
Representing the latest in a recent string of similar acquisitions by CCI, Tuesday’s deal encompasses 11,500 route miles of fiber network lines that have been installed or are being built by FiberNet to serve major metropolitan markets and other locations in Florida and Texas. Upon consummation of the transaction, CCI would own or hold “indefeasible rights of use” to more than 28,500 fiber optic route miles nationwide. CCI also anticipates that, in the year following consummation, the transaction will contribute between $105 million and $110 million to gross margin along with $15-$20 million in general and administrative expenses.
CCI, which currently controls 40,000 towers and 17,000 miles of fiber network infrastructure, expects that the acquisition will close during the first half of 2017. Explaining, “as demand for wireless connectivity continues to grow, small cells are playing an increasingly important role in adding the network capacity and density needed to provide ubiquitous high-speed, high-capacity wireless services,” CCI CEO Jay Brown told reporters: “we believe our investment in FiberNet further strengthens our leading position in small cells and will enhance our long-term dividend growth.”