Crown Castle International Corp. agreed to sell its Australian unit of wireless towers to a group of investors for about $1.6 billion to finance the acquisition of a fiber-services provider that furthers its expansion in the U.S.
The sale to a consortium led by Macquarie Group Ltd. will bring in approximately $1.3 billion in net proceeds, said Houston-based Crown Castle. The cash will be used to fund last month’s purchase of Sunesys and pay down debt.
Crown Castle, along with rival American Tower Corp., has been increasing its holdings in the U.S. wireless industry, as carriers look to offload their cell site properties. Through Sunesys, bought for $1 billion, Crown Castle will be able to connect sites through fiber-optic cable and help boost wireless network capacity in major cities like Los Angeles, Philadelphia, Chicago and Atlanta.
The Sunesys purchase added to recent deals including Crown Castle’s $4.8 billion purchase and lease transaction with AT&T Inc. at the end of 2013. Tower companies typically operate the towers like buildings and lease space to carriers looking to expand networks.
Crown Castle, the operator of about 40,000 wireless towers, is trying to capture some of the spending carriers are making to improve network coverage. One way to do it is using fiber-connected smaller cell systems in more locations.
“We are in the early stages of small cells deployment and are excited by the opportunities that we see ahead of us,” Crown Castle Chief Executive Officer Ben Moreland said in a statement Thursday.
Established in 2000, the Australian unit has about 1,800 sites serving wireless carriers such as Optus, Telstra and Vodafone Hutchison Australia.
The acquisition will be funded by equity investment and third-party debt finance, consortium members Macquarie Infrastructure and Real Assets, pension fund UniSuper Management Pty and UBS Global Asset Management said in a joint e-mailed statement.
Crown Castle shares rose less than 1 percent to $82.95 at 9:53 a.m. in New York. The stock was up 4.6 percent this year as of Wednesday’s close, compared with a 6 percent decline at American Tower.