Building wireless infrastructure through a long-term partnership
TowerCo I, II, III and IV (together, “TowerCo”) is an owner and operator of wireless communications infrastructure. The company was founded in 2004 by tower industry veterans and based in Cary, NC. Between 2005 and 2018, Newlight increased its capital investment multiple times and supported TowerCo through four successful sale transactions.
In parallel with a sale process for the majority of its assets, TowerCo III’s management and investors, including Newlight, created a fourth platform in 2015 to continue to execute on the growth opportunity. In 2016, TowerCo III sold 253 towers and 95 ground rights and marketed sites to Grain Communications and the remaining 127 assets were acquired by TowerCo IV. In 2018, TowerCo IV sold its remaining 283 towers and 52 third-party ground rights to Peppertree Capital Management.
- Status: Realized
- Sector: Digital Transformation
- Investment Year: 2015
- Region: North America
We would like to thank Newlight for being our anchor investor and partner for over 13 years as we built and sold our business four times.
TowerCo’s Co-Founder & CEO on Newlight as a long-term partner to a rapidly evolving business.
Background and Newlight Value Add
In TowerCo, Newlight found an opportunistic and scalable leadership team, with expertise in evaluating, acquiring and integrating large tower portfolios (3,000+ towers), tuck-in acquisitions, and executing on organic growth through new site development. Newlight entered the relationship with an appreciation that TowerCo was operating a growth business in a growth industry. TowerCo’s business model featured long-term contracts, recurring revenues that grow over time with escalators and tenant lease-up, meaningful barriers to entry and high-quality tenants. The cell tower industry continues to benefit from growing demand for wireless services and the need for carriers to upgrade their networks to increase coverage and capacity.
Long-term Partnership
Newlight worked hand-in-hand with TowerCo and its leadership team for over 13 years, building a relationship of trust and encouraging cross-pollination of expertise. As a result, TowerCo could rely on Newlight’s guidance as it sold sites from its maturing portfolio while seeking to retain flexibility around keeping certain sites and rebuilding the business through organic and inorganic growth opportunities.
M&A
Newlight worked closely with TowerCo’s management to underwrite and execute on various acquisition opportunities, including TowerCo II’s acquisition of over 3,000 sites from Sprint Nextel in 2008.
Capital Raising and Structuring
Newlight’s capital markets expertise proved to be an important tool for TowerCo’s management team to execute on its growth plans, which included large-scale asset acquisitions. In 2008, Newlight co-led an equity syndication process for the Sprint Nextel acquisition, which TowerCo II closed on an all equity basis amidst the financial crisis. Newlight guided TowerCo II in raising a $240mm senior secured credit facility in 2009, which was upsized to $440mm in 2011. Newlight also oversaw a number of standalone revolving credit facilities for TowerCo since 2005.