Funds managed by Blackstone Infrastructure Partners have purchased from Manulife Investment Management a 35 percent stake in Phoenix Tower International (PTI), a private cell tower platform in the Americas and Europe, Blackstone said. PTI has its headquarters in Boca Raton, Florida.
“Founded in 2013, Phoenix Tower International operates over 14,000 cell towers across 18 countries,” a statement from Blackstone reads. “PTI owns and operates high-quality wireless infrastructure sites in markets experiencing strong wireless usage growth around the world. PTI’s expansion is focused throughout the Americas and Europe.”
Besides funds managed by Blackstone, PTI’s investors include members of its management team.
Commenting on the announcement, Greg Blank, senior managing director in Blackstone’s infrastructure business, said, “Cell towers represent one of the highest-quality and most durable infrastructure asset classes given their mission-critical nature and long-term growth tailwinds.”
Blanks said that that Blackstone would support PTI’s growth and expansion by using Blackstone’s size and resources.
The CEO of Phoenix Tower International, Dagan Kasavana, said that there is a massive growth opportunity in the wireless infrastructure sector worldwide.
Recep Kendircioglu, head of infrastructure investments at Manulife Investment Management, said that Manulife’s investment in PTI supported its goal to expand digital connectivity globally.
“Together with the PTI team, we achieved a great outcome,” Kendircioglu said.
Blackstone said its investment in Phoenix Tower International is the most recent example of its digital infrastructure platform investments. Digital Infrastructure, which enables mobile connectivity and cloud-based computing for the businesses advancing the economy, has long been an area of focus for Blackstone, with COVID-19 accelerating the sector’s growth and required investment, the company said. Most recently, Blackstone invested in QTS, a data center company, and Hotwire, a provider of fiber-to-the-home in the United States, the company said.
According to Blackstone, it is the world’s largest alternative asset manager.
“We seek to create positive economic impact and long-term value for our investors, the companies we invest in and the communities in which we work,” the company statement reads. “We do this by using extraordinary people and flexible capital to help companies solve problems. Our $731 billion in assets under management include investment vehicles focused on private equity, real estate, public debt and equity, infrastructure, life sciences, growth equity, opportunistic, non-investment grade credit, real assets and secondary funds, all on a global basis.”
Under terms of an exclusivity agreement with Outremer Telecom, Phoenix Tower International would acquire 203 wireless towers, together with wireless towers to be constructed during the next 10 years in the French West Indies through a build-to-suit program, according to a statement from Phoenix Tower International. If concluded, the transaction would expand and solidify Phoenix Tower International’s position as the largest tower infrastructure provider in the market with more than 437 towers and would grow its footprint across Europe and the Caribbean, the statement reads. Subject to what Phoenix Tower International said were customary conditions for this type of transaction, the agreement would result in the two companies’ establishing a long-term collaboration in which Outremer Telecom would occupy the sites for at least 20 years.
“With this transaction, Phoenix Tower International would continue to expand its presence across European territories and its disciplined investment strategy,” said Dagan Kasavana, the company’s CEO. “The increased presence of Phoenix Tower International, a neutral-host independent tower company, in the region would facilitate increased coverage expansion for all wireless operators and ultimately enhanced connectivity for the population of French West Indies. Phoenix Tower International is proud to be working with the mobile network operators across the world and is pleased to have entered into advanced discussions with the Altice Group on this transaction.”
Mathieu Cocq, CEO of Outremer Telecom, expressed enthusiasm about creating a new tower partnership in the French West Indies.
“Phoenix Tower International would be a long-term partner of the highest quality who shares our vision to invest in leading infrastructure,” he said.
Through its subsidiaries, Phoenix Tower International owns and operates more than 14,000 towers, 986 kilometers of fiber and more than 80,000 other wireless infrastructure and related sites in Europe, the United States, Latin America and the Caribbean, the statement from the company reads. It said that Phoenix Tower International was founded in 2013 with a mission to be a premier site provider to wireless operators across the Americas in high-growth markets. According to the company, its investors include funds managed by Blackstone Tactical Opportunities and John Hancock, as well as members of the management team.
“Outremer Telecom provides integrated fixed telephony, mobile telephony and internet access services for residential and business customers in Martinique, Guadeloupe and French Guiana,” the Phoenix Telecom International statement reads. “Created in 1986 under the name Infotel, the group was renamed with its current name in 2000. The group was listed on the Paris stock exchange in 2007. The Altice group acquired Outremer Telecom in 2013. Following the acquisition of SFR by Altice, Outremer Telecom now operates under the SFR brand.”
Phoenix Tower International (PTI) has expanded its reach into small cells in the United States with the purchase of Syscom Telecom, which manages and markets more than 80,000 sites
for small cell and macro cell deployments with various small cell master agreements in place with wireless operators.
“PTI has been evaluating opportunities to back a small cell focused team in the United States as a way to help our customers with their next generation deployments” stated Dagan Kasavana, CEO of Phoenix Tower International.
PTI is mostly known as a multi-national tower owner, owning or managing more than 5,500 sites in South America, Caribbean, Central America and Mexico. But, recently, PTI has diversified with investments across the Americas, including the acquisition of fiber in Mexico, the DAS investment in Fast Site Solutions in Central America, and the small cell investment in Syscom LatAm in South America.
The key to expanding into other areas, such as small cells, is to find the right team with a differentiated offering, Kasavana said.
“We felt like these 80,000 nontraditional sites [of Syscom Telecom], which might have been seen as too small to hold a macro installation, are the perfect capacity, size and height for small cell installations. That was a way to differentiate our offering and we saw that the Syscom Telecom team over the last few years has major inroads with the carriers,” he said.
With the deployment of 5G in the offing, carriers are developing dense networks of thousands of small cells. An estimated 80 percent of all new sites will be small cells in the near future. Kasavana said the timing is right to get into the small cell space.
Although the carriers have been self-performing to meet their small cell needs, Don Van Splunteren, global vice president of sales, said, they will need third-party help to meet the estimated small cell needs for 5G.
“The carriers are going to need partners that understand not only their roadmap from 4G to 5G but also the complexity that a small cell network brings with it,” he said. “We need to offer them the infrastructure in a plug-and-play way and take the complexity out of the equation.”
An essential component of small cell deployment is using a centralized RAN architecture with a tower as the hub. We continue to believe that small cells built around a tower can leverage the C-RAN architecture for the network needs. Tower are going to be an essential component of ongoing 4G deployment and most assuredly 5G,” Kasavana said.
August 6, 2015 — Apparently T-Mobile did not sell all of its towers to Crown Castle back in 2012. This week, the carrier entered into a contract to sell the rights to more than 600 wireless communication tower sites to Phoenix Tower International, which will have the exclusive right to manage and operate the sites via its local U.S. subsidiaries.
Dagan Kasavana, Phoenix Tower International CEO, said the T-Mobile tower locations are well situated for additional lease-up opportunities. Terms of the transaction remain confidential, industry sources estimate the deal at between $150 million and $175 million.
Private companies have dominated the M& A market in 2015. The Phoenix Tower deal follows the Vertical Bridge’s purchase of towers owned by CiG Wireless, U.S. Cellular and iHeartRadio, as well as NTELOS’ tower sale to Grain Management and CTI Towers’ sale to InSite Wireless.
“It’s interesting that we are seeing private companies stepping up and beating public companies in these transactions,” said Clayton Funk, managing director, Media Venture Partners.
Prior to co-founding Phoenix Tower International, Kasavana and Natalya Kashirina (VP of M&A), were involved in mergers and acquisitions of U.S.-based Global Tower Partners. Phoenix has owned a small portfolio of U.S. towers in the United States, but this is its first material domestic acquisition.
“The [Phoenix Tower] management team has significant experience operating and leasing tower sites in the United States and is thrilled to have a significant portfolio of high quality sites in the United States to offer to our customers,” Kasavana.
Furthermore, this transaction represents another milestone in Phoenix Tower’s expansion and allows us to service our customer’s strategic needs across the Americas.”
The U.S. tower acquisition was preceded by Phoenix Towers’ acquisition of T4U Holding Brasil by Phoenix Tower in June. T4U’s towers will be merged into Phoenix Tower’s existing Brazilian tower business, Phoenix Tower do Brasil, which will own and operate 529 wireless infrastructure assets with a pipeline of more than 250 wireless towers under construction.
Including Phoenix Tower do Brasil, the T-Mobile acquisition brings Phoenix Tower’s total site count to 1,600 towers.
In September 2014, Phoenix Tower International acquired American Tower’s Panamanian business, which consisted of 60 telecommunications sites. Founded in 2013, Phoenix Tower has operations in Costa Rica, Panama, Dominican Republic, Colombia, the United States and Brazil.
Proving there is life after GTP, Dagan Kasavana, who ran the mergers and acquisitions department for Global Tower Partners, has started his own venture, focusing on acquiring, developing, owning, leasing and operating cell towers in Latin America. The company, known as Phoenix Tower International, was formed to focus on middle market transactions.
Of the major markets in Latin America, Phoenix Tower will be looking for opportunities in stable countries that already have public and private tower companies.
“There are key markets in Central and South America that are good for tower ownership,” Kasavana said. “Brazil is an interesting market,where wireless growth and penetration are projected to be fueled over the next three to five years, but so are Columbia, Panama and Costa Rica.
“Growth is projected throughout the region, and we have the ability to capture some of the upside, which is similar to what we have seen in the United States in the last three to five years,” he added.
Since Global Tower Partners sold its portfolio, Kasavana has considered opportunities running M&A programs for various tower companies as well as going it on his own. “I talked with investors who supported this concept for a new tower company that is focused on select opportunities [in Latin America] that others are not,” he said.
In forming Phoenix, Kasavana has brought in several colleagues from his days at GTP. Former GTP Senior Legal Advisor Tim Culver has joined Phoenix in a similar position. Natalya Kashirina, who worked with Kasavana in GTP’s M&A department, is now Phoenix vice president, mergers and acquisitions. Additionally, Orlando Porras, formerly of Ernst and Young, who did many projects for GTP, is now chief financial officer for Phoenix.
Kasavana plans to deal with the cultural challenges of Latin America by using a personal touch. Phoenix will remain based in Boca Raton, Fla., but will build offices in a region as it gains significant market share there. “We are well suited to address these challenges because we don’t see these as satellite offices leveraging off of the U.S. presence. We are going to build them from the ground up, leveraging the local people, the local customers and local operations. And I will be on a plane regularly to meet with them personally,” he said.
A variety of equity investors are involved in Phoenix, which will be formally announced in the near future. The company has a number of transactions in the works and is working to close them.
“At GTP, we had a great run, and it is really fun to see [the former GTP partners] all blossom into new business lines to do new things after the sale,” Kasavana said. “Obviously, we learned a lot of that from Marc Ganzi [former CEO of GTP]. I owe him a lot of credit for instilling the entrepreneurial spirit within me. It is something I take with me going forward.”