U.S. cell tower giant SBA to sell Canadian network for $446-million

Florida-based SBA Communications Corp. SBAC-Q is selling its Canadian cell tower network to a European private equity and investment fund for $446-million, the latest in a series of recent telecom infrastructure deals.

SBA is a real estate business that owns cellphone towers in the U.S., Canada and other countries. The company’s 369 towers represented one of Canada’s largest independent wireless tower portfolios.

During its second-quarter earnings call Tuesday, SBA said it had signed a definitive agreement to sell all its Canadian tower holdings to CVC DIF, the infrastructure division of U.K.-based CVC Capital Partners PLC.

Why are Canada’s largest telecom companies selling stakes in their core infrastructure?

In a call with analysts, SBA chief financial officer Brendan Cavanagh said that since entering Canada in 2009, the company has had “reasonable success” but had been unable to meaningfully grow and made the decision to explore alternatives.

“Given what we saw as a limited ability to continue to grow our portfolio, we thought that that was the right thing to do for us financially,” he said.

Although Canada’s telecom carriers have traditionally owned most of their own towers, unlike most of their global peers, some were owned by private operators, and some carriers are selling off portions of their infrastructure to pay down debt.

Just last week, Telus Corp. T-T agreed to sell a minority stake in its tower business to pension fund Caisse de dépôt et placement du Québec for $1.26-billion.

In a press release Tuesday, CVC DIF partner Tom Goossens said the Canadian tower portfolio was diversified and underpinned by long-term customer relationships. The business had been bringing in approximately $27-million in annual leasing revenue and $15-million of cash flow after taxes, according to SBA.

In a note to investors, Bank of Nova Scotia analyst Maher Yaghi said the move reflects “SBA’s disciplined approach to portfolio management, focusing on markets with stronger growth potential in the medium to long term.”

The SBA transaction is expected the close before the end of 2025, subject to regulatory approvals. TD Securities served as financial adviser for the deal.

In June, Rogers Communications Inc. RCI-B-T closed a $7-billion sale of a minority stake in a portion of its backhaul, another part of its wireless transport infrastructure, to New York-based Blackstone Inc. and a consortium of pension funds.

Rogers, Bell Canada parent BCE Inc. BCE-T and Quebecor Inc. QBR-B-T have also considering spinning off parts of their own cell tower networks, The Globe has reported.

Rogers owns 7,700 towers, Bell parent BCE has 4,900 and Quebecor has 3,800, according to regulatory filings.