Uniti Sells 500 Towers to Melody Investment Advisors

By The Editors of AGL

May 12, 2020

Uniti Group has sold 90 percent of Uniti Towers, including 500 towers, to Melody Investment Advisors, a communications infrastructure asset manager, for $220 million in cash. The purchase will be funded by Melody Communications Infrastructure Fund II.

Through an investment in an affiliate of Melody, Uniti will retain a 10 percent investment interest in the tower business and will receive an incremental earnout from Melody for each additional pipeline tower completed in 2020. In addition, as part of the transaction, Melody and Uniti will enter into a strategic relationship to collaborate on integrated solutions for wireless carriers requiring towers, fiber and small cells infrastructure. The transaction is subject to various closing conditions and is expected to close by the end of second quarter 2020.

The sale price for the entire business implies a multiple of 34 times annualized tower cash flow multiple for the entire business, according to Mark Wallace, Uniti vice president, chief financial officer and treasurer.

“For the full year 2020, we now expect towers revenues to be about $7 million with reported adjusted EBITDA loss of $1 million,” Wallace said. “The expected pre-tax gain on the sale of the U.S. towers business of $38 million is expected to be reported as a gain on sale of real estate and accordingly will be excluded from our reported revenues, adjusted EBITDA and AFFO.”

The acquisition enhances Melody’s position as a leading owner and operator of wireless infrastructure assets. With the addition of Uniti’s towers, Melody and its affiliates now own and market more than 4,000 towers, ground leases and structure and rooftop leases, including pipeline sites. Melody and its affiliates are a top five independent owner of national wireless infrastructure assets and one of the largest privately owned telecom landowners in the United States.

Melody Investment Advisors focuses on communications infrastructure transactions ranging from $50 million to $1 billion or more, including telecom easements, wireless towers, data centers, fiber optics and other mission critical parts of communications infrastructure.