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$7.1 billion takeover of Lightower by Tower Operator Crown Castle

To expand its operation into urban areas of the U.S. Northeast, tower operator Crown Castle International has said that it would buy privately held Lightower Fiber Networks for around $7.1 billion in cash.

Crown Castle had been looking to diversify it network tower business. Therefore, it decided to buy the company from a group of investors which includes Pamlico Capital and Berkshire Partners LLC.

If the deal goes through then it will double the assets of the company. At present, it owns 60,000 route miles of broadband network. After this deal is over. The company will expand its operation by opening broadband networks in northeastern metro places. These areas include some of the most prominent cities such as Boston, Philadelphia, and New York.

With the increase in the use of Wi-Fi. The company sees growth in small-cell towers for wireless carriers. The technology enables an increase in capacity to strengthen coverage in urban areas. Press had already mentioned about the offer made by Crown Castle to Lightower last week.

Crown Castle is hopeful that the purchase will increase the dividends of the company. The deal will add around half a billion to operational costs. This cost will be recovered by the first quarter of 2018.

Crown Castle also believes that the company will add $850 million to $870 million to its fund when the operations begin in the newly acquired areas.

Morgan Stanley and BofA Merrill Lynch will finance the $7.1 billion takeover of Lightower. Morgan Stanley is the financial advisor for Crown Castle. Moreover, Evercore and Citigroup are the financial advisors for Lightower.


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