Exhibit 99.1
SpectraSite and SBC Communications Partner In World's Largest Tower Transaction
$1.3 Billion Deal Includes Approximately 4,700 SBC Towers
Positions SpectraSite with #1 Tower Footprint in Top 50 US Markets
CARY, N.C., Aug. 28 /PRNewswire/ -- SpectraSite Communications, Inc., a
division of SpectraSite Holdings, Inc. (Nasdaq: SITE), and SBC Communications,
Inc. (NYSE: SBC) today announced a definitive agreement under which SBC will
grant the exclusive rights to lease 3,900 communications towers to
SpectraSite, plus an estimated 800 new towers under a 5-year exclusive
build-to-suit agreement, for a total of at least 4,700 towers. The
transaction is valued at $1.308 billion, and gives SpectraSite the largest
tower portfolio in the top 50 U.S. markets.
The consideration for the transaction includes $983 million in cash and $325
million in SpectraSite common stock. Under the terms of the transaction,
SpectraSite will have exclusive lease rights to 3,900 SBC towers, and will be
able to sublease space on the towers to third party tenants. In addition,
SpectraSite has the option to purchase the 3,900 SBC towers at the end of the
respective lease terms (on average, approximately 27 years) at a present value
of $251 million. SBC Wireless has agreed to sublease space from SpectraSite on
the towers for approximately $65.5 million per year with annual lease rate
escalators. The transaction is expected to close in increments beginning in the
fourth quarter of this year, and is subject to customary closing conditions.
The SBC towers are located in major metropolitan markets throughout the
United States, with significant tower concentrations in Los Angeles, San Diego,
San Francisco, Boston, Washington D.C., Baltimore, Philadelphia, Dallas, St.
Louis, Las Vegas, Chicago and Cleveland. The SBC transaction gives SpectraSite
control over approximately 9,000 towers in the United States, clustered in
metropolitan markets, and cements SpectraSite's position as the leading tower
provider in the top 50 markets.
"This is a win-win deal for both companies -- one that has significant
financial benefits for both parties, capitalizes on their respective core
strengths and creates a long-term, strategic relationship between SBC and
SpectraSite," said Jim Kahan, senior executive vice president, Corporate
Development for SBC. "The ongoing quality and integrity of our wireless network
is paramount to our continued success and growth, and we're confident
SpectraSite has the experience, expertise, and network operating capability to
manage our tower assets. In fact, we have a very positive existing relationship
with SpectraSite and we've received great feedback directly about their
performance from their other customers."
"This transaction is not only company transforming, but industry
transforming," said Stephen H. Clark, CEO, SpectraSite. "First, it strengthens
our position as the undisputed leader in the top 50 metropolitan markets, and
gives us the critical mass to be a long-term winner in this business. The SBC
towers are concentrated in the leading metropolitan markets, which combined with
the Nextel and AirTouch portfolios, give us the number one metropolitan tower
footprint. With nearly two thirds of our total tower portfolio located in the
top 50 markets, we are clearly the tower provider of choice for any wireless
carrier looking to launch or expand coverage in a major market.
"Based on the demand for towers in these locations, and the available
capacity on the towers, we believe that the SBC portfolio will generate
significant shareholder return for SpectraSite. SBC's portfolio of strategically
located towers concentrated in leading markets could never be replicated in
today's zoning environment. As a result, the SBC assets are some of the most
desirable towers in this industry. In addition to the premium location of the
towers, they have an average capacity of 3.75 tenants per tower, which
represents the potential for extremely attractive recurring revenue on a per
tower basis.
"The build-to-suit component of this transaction represents tremendous
long-term value for SpectraSite. We have entered an exclusive agreement to build
or buy 100% of the new towers required by SBC over the next five years. SBC
estimates that the build-to-suit agreement will include a projected 800 towers.
We anticipate a much higher number, as SBC is at the forefront of the wireless
industry in terms of new technology rollout," Clark added.
"SBC's investment in SpectraSite is a strong sign of support in SpectraSite
by yet another industry leader," said Lawrence B. Sorrel, Chairman of the
SpectraSite Board, and General Partner of Welsh, Carson, Anderson & Stowe, which
is also SpectraSite's largest investor. "SBC is the third substantial carrier
transaction that SpectraSite will complete. The SBC portfolio was highly sought
after among the major consolidators in the tower industry, and SBC was the first
carrier to have the opportunity to truly evaluate the progress and overall
performance of the tower companies from each of the prior carrier deals. The
fact that SpectraSite was selected from a competitive field validates that we
are the leading operator, and the partner of choice for carriers. SBC will be
entitled to occupy one seat on our Board of Directors. We are proud to partner
with a world class organization of SBC's caliber."
"Combining our existing portfolio, SBC's portfolio and the exclusive
build-to-suit agreement bolsters our leadership position, and allows us to take
full advantage of the explosive growth in the wireless industry both today and
in the future," said Tim Biltz, Chief Operating Officer, SpectraSite. "Wireless
usage is highest and new applications are rolled out first in the major
metropolitan markets, which means demand will continue to be the greatest in
these markets. Current network deployments, both new build and expansion, are
focused on the metropolitan markets. This will accelerate as 2.5 and later 3G
networks begin to be deployed. SpectraSite is in an unparalleled position to
capitalize on the growth of existing technology and the introduction of new
technologies in the wireless industry."
Tower Portfolio Highlights
The SBC portfolio includes significant clusters of towers in major
metropolitan markets. As a result of the SBC transaction, SpectraSite will have
the #1 tower portfolio in 8 of the top 10 metropolitan markets, 13 of the top 20
metropolitan markets and 22 of the top 50 metropolitan markets, a clear industry
leadership position. The following chart depicts the rank of the SpectraSite
tower portfolio* in the top 10 metropolitan markets in the United States.
Market SpectraSite Tower
Portfolio Rank in Market
New York 3
Los Angeles 1
Chicago 1
San Francisco 1
Philadelphia 1
Detroit 1
Dallas 1
Boston 1
Washington, DC 1
Houston 3
* includes the number of towers, pro forma for the SBC transaction. Number
does NOT include company owned or managed rooftops.
The SBC portfolio includes a combination of monopole (53%), self-support
(34%) and guyed (13%) towers. The average height of the towers is 151 feet and
the estimated average capacity is 3.75 tenants.
SpectraSite will host a conference call to discuss the above transaction.
The call will take place today, August 28, 2000, at 10:00 AM Eastern Time. To
participate, dial 1-800-633-8481 approximately 10 minutes before start time. A
replay of the call will also be available until midnight, September 7, 2000. To
access the replay, dial 800-633-8284. The passcode for the replay is 16147894.
In addition, SpectraSite will have a slide presentation available on the
company's website at http://www.spectrasite.com .
About SBC Communications Inc.
SBC Communications Inc. (http://www.sbc.com) is a global communications
leader. Through its subsidiaries' trusted brands -- Southwestern Bell,
Ameritech, Pacific Bell, SBC Telecom, Nevada Bell, SNET and Cellular One -- and
world-class network, SBC's subsidiaries provide local and long-distance phone
service, wireless and data communications, paging, high-speed Internet access
and messaging, cable and satellite television, security services and
telecommunications equipment, as well as directory advertising and publishing.
In the United States, the company currently has 61.2 million access lines, 12.2
million wireless customers and is undertaking a national expansion program that
will bring SBC service to an additional 30 markets. Internationally, SBC has
telecommunications investments in more than 20 countries. With approximately
219,000 employees, SBC is the 13th-largest employer in the U.S., with annual
revenues that rank it among the largest Fortune 500 companies.
About SpectraSite Communications, Inc.
SpectraSite Communications, Inc. (http://www.spectrasite.com), based in
Cary, North Carolina, is one of the leading providers of shared antennae sites
and outsourced network services to the wireless communications and broadcast
industries in the United States and Canada. SpectraSite's business includes
owning and leasing antennae sites on towers, owning and leasing in-building
wireless distribution systems, owning and managing rooftops, network planning
and deployment, and construction of towers and related wireless facilities.
SpectraSite owns or manages more than 15,000 sites, including 3,474 owned
towers, in 98 of the top 100 markets in the United States. Pro forma for all
pending transactions SpectraSite will own or manage more than 20,000 sites,
including nearly 9,000 towers. SpectraSite's customers are leading wireless
communications providers and broadcasters, including Nextel, Sprint PCS, AT&T
Wireless, Verizon, BellSouth, VoiceStream, Telecorp, Teligent, Winstar,
Metricom, Cox Broadcasting, Clear Channel Communications and Paxson
Communications.
This press release contains "forward-looking statements" concerning future
expectations, plans or strategies that involve a number of risks and
uncertainties. The Company wishes to caution readers that certain factors may
have affected the Company's actual results and could cause results for
subsequent periods to differ materially from those expressed in any
forward-looking statement made by or on behalf of the Company. Such factors
include, but are not limited to (i) substantial capital requirements and
leverage principally as a consequence of its ongoing acquisitions and
construction activities, (ii) dependence on demand for wireless communications,
(iii) the success of the Company's tower construction program and (iv) the
successful operational integration of the Company's business acquisitions. The
Company undertakes no obligation to update forward-looking statements to reflect
subsequently occurring events or circumstances.
CONTACT: Noreen Allen Lenny Santiago
SpectraSite Communications Brainerd Communicators
919-465-6678 212-986-6667
noreen.allen@spectrasite.com santiago@braincomm.com
SOURCE SpectraSite Communications, Inc.
Web Site: http://www.spectrasite.com