SBA Communications Corp. (SBAC:US) acquired 800 wireless towers in Brazil from Telefonica SA (TEF:US)’s Vivo SA division for 362.8 million reais ($178 million), letting it begin operating in the country.
The towers were purchased using cash on hand and the company’s revolving credit line, SBA said today in a statement. The assets are expected to produce about 19 million to 23 million reais in cash flow next year, the company said.
Tower companies, which make money by leasing antenna space to carriers, have been taking advantage of favorable borrowing conditions -- low interest rates and access to capital -- to ramp up acquisitions in the U.S. and abroad. SBA shares (SBAC:US) have increased 64 percent this year, part of an industrywide surge in valuations.
“It’s such a great recurring cash flow story, and these companies are great derivative plays on the growth of wireless demand,” Paul Sweeney, an analyst at Bloomberg Industries, said in an interview.
The latest acquisition provides SBA with a national footprint of “high quality towers, including leasing arrangements with all of the major broadband wireless providers,” Chief Executive Officer Jeffrey Stoops said in the statement.
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