ADDvantage Technologies Group is forming a joint venture with YKTG to share in the deconstruction work on a "major U.S. wireless provider's" cell tower sites across 13 states.
ADDvantage Technologies CFO Scott Francis could not confirm which provider or the specific states in which the towers are being commissioned but he did say the work is taking place in the U.S. Northeast corridor.
ADDvantage is expecting to net about $1 million in pretax income for 2016 through the JV.
"We are proud to announce this strategic joint venture with YKTG as it opens a new opportunity for us in the service business. We also anticipate generating additional revenues by processing decommissioned equipment received from this agreement through our recycling services program, and by selling additional equipment to this major U.S. wireless provider, utilizing our partnership with YKTG," David Humphrey, President and CEO of ADDvantage Technologies, said in a statement.
ADDvantage will own 49 percent and YKTG will own 51 percent of the JV, dubbed YKTG Solutions. For its part, ADDvantage will handle financing and accounting for the deconstruction contract. Its subsidiary, Nave Communications, will provide warehouse storage space for the decommissioned equipment on a short-term basis.
Francis said that ADDvantage is hoping that since it's already serving as the staging area for the decommissioned equipment, that the provider will decide to save on freight and just let his company process. Until then, ADDvantage won't take a deeper look at the equipment so it can't say for sure how much revenue could be generated by processing it.
Roscoe C. Young II, president and CEO of YKTG, agreed.
"In addition, we hope to keep our relationship with ADDvantage in place to cover other near-term opportunities we expect to be awarded from other wireless and cable providers in 2016 and 2017," Young said.
Francis said no future deals have been finalized for the JV yet but that ADDvantage is "hoping it's not a one and done deal."
- read this ADDvantage Technologies press release
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