Optasite gets $150 million credit
Westboro tower firm marks quarter-billion in equity and credit since 2004
Optasite Inc. announced last week that it had extended its credit facility with Morgan Stanley to $150 million, giving a huge infusion of cash to the company as it looks to double its portfolio of communications towers in the coming year.
The deal replaces a $65 million credit facility extended to the Optasite in March by GE Capital Finance. Since its first round of funding in 2004, the company has received nearly $97 million in equity, and $150 million in debt.
Optasite, built around the management and acquisition of communication towers, opened the year with 115 towers in its portfolio. It will end the year with more than 400. Ross says the company’s goal is to continue that pace through 2007, when he expects to have 800 to 1,000 towers in the Optasite portfolio. The firm has recently added five new groups of towers to that portfolio and is in the midst of closing on four more, Ross says.
It may not be the last big deal of the year for Optasite.
"We anticipate raising more equity in the remainder of the year," says Jim Ross, chief development officer for the firm. All of the company’s original equity partners have remained with Optasite - including Highland Capital Partners Inc. in Lexington and Village Ventures in Williamstown - as well as newcomers Key Venture Partners in Waltham and Babson Capital Management in Boston who invested in the company during its C round of financing in March.
"Tower management is a capital-intensive business and the new round of financing will allow us to grow the company dramatically by building and acquiring more towers," Ross says.
Some of the new credit facility will be used to pay for those deals, he says, but most will go to filling future deals in the company’s pipeline for 2007.
Ross says Optasite’s robust growth stems from two larger trends in the wireless industry: A federal law allowing wireless customers to keep their phone numbers and the ubiquity of bandwidth-intense applications like wireless broadband.
"Companies are focusing now on adding coverage for their customers, as well as increasing broadband applications to meet the demand," he says.
Much of that growth stems from demand for services such as downloadable music and photos, which have become a key piece of the wireless business in the last several years. That increased demand has led to more towers being leased by carriers such as Cingular Wireless, Verizon Wireless - both among Optasite’s customers.
Optasite has significant holdings of towers with wireless broadband capability, but also in those for traditional services such as cellular phone service and regular broadcast transmissions. Optasite owns towers in 25 states, with concentrations in the Northeast, Gulf Coast and Mid-Atlantic regions. It has also a significant number of towers in Michigan.
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