US wireless tower operator SBA Communications has announced it will offer about 6 million shares of its Class A common stock in an underwritten public offering.
The company stated that it expects to use the proceeds to pay off debt and for working…
US wireless tower operator SBA Communications has announced it will offer about 6 million shares of its Class A common stock in an underwritten public offering.
The company stated that it expects to use the proceeds to pay off debt and for working capital purposes.
Specifically, SBA said it intends to redeem US$131.25m of its 8% senior notes due in 2016 and the same amount of its 8.25% senior notes due in 2019, resulting in cash interest expense savings of US$21.3m.
Citigroup and JP Morgan will act as underwriters for the offering.
According to an associated company SEC filing, the 2016 and 2019 notes each have principal balances of US$375m. The same filing cited the company’s total long-term debt as US$3.35bn.
SBA said it will have 115.8 million shares of Class A common stock after the offering.
In February, SBA agreed to acquire infrastructure provider Mobilitie Investments for US$850m in cash and 5.25 million shares of its Class A common stock. The cash consideration for the deal, which SBA expects will close in the second quarter of this year, will be paid from a combination of cash on hand, existing credit facilities and $500m in financing commitments.
In the abovementioned SEC filing, the company pointed out that: “Neither the completion of this offering nor the completion of the transaction is conditioned on the completion of the other.”
SBA said it expects the Mobilitie acquisition to generate adjusted EBITDA of about US$72m-US$73m for the full year 2012.
“Pro forma for the closing of the Mobilitie transaction and this offering, including the use of proceeds for the claw-back of our senior notes, we estimate our net debt to annualised adjusted EBITDA ratio would have been 7.2x to 7.4x,” the filing said.
