Thursday, November 23, 2017

Crown Castle International buys LA provider in $600m data centre, fibre deal

Company bulks up own portfolio with three colocation properties and more than 3,000 miles of dark fiber.

Los Angeles data centre operator Wilcon has entered a definitive agreement to be acquired by communications services organisation Crown Castle International Corp.

The deal, which tops nearly $600m, will see Crown Castle International expand its portfolio with Wilcon’s dark fiber, colocation and lit transport infrastructure.

Wilcon’s data centre portfolio includes three data centres all located in the Californian city, totalling 23,700 sqf.

Its fiber and lit transport footprint includes 3,000 miles of fibre connecting over 1,000 internet hubs, data centres, enterprise locations and wireless communications facilities throughout Southern California.

Crown Castle International has today approximately 40,000 towers and 26,500 route miles of fibre supporting small cells with a presence in the top 100 US markets.

Following the announcement, the company’s shares were up $0.30 to $96.30. Crown Castle is expected to release its Q1 2017 results on April 24.

In the corporation’s 2016 full year results, the company reported a capital expenditure of $874m with site rent revenues growing 7% compared to 2015 to $3.23bn. Crown Castle said it expects to grow this by 8% in 2017 to $3.48bn.

However, the company has reported a net loss of 77%, going from $1.52bn in 2015 to $357m in 2016. For 2017, Crown Castle expects to grow its net income by 8% to $385m.

Jon A. DeLuca, President and CEO of Wilcon, said: “I am pleased to announce our agreement with Crown Castle. Since 1998, Wilcon has provided innovative network infrastructure solutions and exemplary service to leading businesses throughout Southern California.

“We are excited to be part of Crown Castle and look forward to expanding our capabilities for our valued customers.”

The Bank Street Group LLC served as exclusive financial advisor and Alston & Bird LLP served as legal counsel to Wilcon and Pamlico in connection with this transaction.

Pamlico Capital, a middle market private equity firm focused on growth oriented businesses, was the majority owner of Wilcon.

Scott Stevens, a Partner at Pamlico, said: “We have enjoyed partnering with Jon DeLuca and his team as they significantly increased the company’s fibre footprint, completed a strategic acquisition, enhanced the company’s value proposition to its customers, and successfully scaled the business over the last five years.”