SBA Communications Buys 800 Towers in Brazil

SBA Communications Corp. (SBAC) acquired 800 wireless towers in Brazil from Telefonica SA (TEF)’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 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.

SBA, based in Boca Raton, Florida, is the third-biggest publicly traded cellular-tower company by market valuation, behind American Tower Corp. (AMT) and Crown Castle International Corp. (CCI)

SBA fell 0.5 percent to $70.42 at the close in New York. American depositary receipts of Telefonica, down 20 percent this year, rose 0.5 percent to $13.40 today.

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.

To contact the reporter on this story: Alex Sherman in New York at asherman6@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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