Communications Sales & Leasing (CS&L) may have only recently debuted its Uniti Fiber subsidiary -- one that consists of its acquisitions of Tower Cloud and PEG Bandwidth -- but it’s clear that it is ready to scale its business further with plans to upgrade its senior secured credit agreement. This agreement will allow CS&L to use an upREIT structure.
What this means is that CS&L will gain more flexibility to pursue acquisitions of other assets, including those that will bolster its Uniti Fiber subsidiary to target wireless backhaul and other wholesale opportunities.
“Use of such a structure is intended to facilitate future acquisition opportunities by providing the Company with the ability to use operating partnership units as a tax-efficient acquisition currency in certain acquisitions of assets or entities that are structured as limited liability companies or other pass-through entities,” CS&L said in an SEC filing. “To implement such a structure, the primary obligor under the credit facilities would become a new operating partnership while the Company would become a guarantor.”
CS&L first made its intentions to pursue additional M&A in September when the company established a $250 million “at the market” equity offering program.
The company has been an active asset buyer, acquiring PEG Bandwidth and Tower Cloud, which will has been combined under its new Uniti Fiber division. Additionally, the company acquired 32 wireless towers and operating rights for 40 towers from Windstream.
While still a relatively young company, CS&L is seeing decent financial results. In the second quarter, CS&L reported new contractual revenue of nearly $40 million due wholesale service wins with three large national carriers and one state's transportation department.
- see this SEC filing
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