Combining BAI Communications and Mobilitie
A multinational communications infrastructure company, BAI Communications, expects to close a transaction in the third quarter that would grow its business mostly in the United States, with potential for international expansion. The pending acquisition of Mobilitie would bring to BAI Communications 10,000 small cells in 45 states, 300 macro towers in 14 states, 220 venues in 39 states, and agreements to provide wireless communications to the public transit systems in Seattle and the San Francisco Bay Area, according to a statement from BAI Communications.
“The acquisition of Mobilitie fits perfectly with our growth strategy, scope, scale and geography,” said Igor Leprince, BAI Communications’ group chief executive officer, in an interview with AGL eDigest. “It’s a one-of-a-kind opportunity because it aligns almost perfectly with our core business as a provider of neutral-host communication services and our expertise in transit. Mobilitie’s scope is almost exactly where our portfolio and world scope is.”
The acquisition would give BAI Communications a national scale and a presence across the entire United States, Leprince said.
“Right now, we are present through Transit Wireless largely around New York and in the East Coast, but Mobilitie will significantly accelerate our development in the region,” Leprince said. “Additionally, it will enhance our offering that we have in key global markets. It’s an acquisition to help us to be more effective in delivering the benefit of neutral-host infrastructure. A benefit also — for Mobilitie — comes from additional funding, additional capability that we bring from around the world, and fulfills our ambition for growth as a neutral host and for growth in the United States.”
Although Mobilitie has 300 towers, a small number in comparison with the tens of thousands of towers several other companies each own in the United States, Leprince said that BAI operates about 700 towers in Australia for mobile network operators and broadcasters. “This is absolutely part of our business,” he said “That’s an important part of the portfolio we’re acquiring from Mobilitie.”
About BAI Communications, Leprince said, “We have been more well-known for our expertise in transit systems and underground, as well as slightly above ground, which is more about small cells for connectivity in a dense, urban type of environment. Clearly, for us, this is an interesting part of the portfolio of Mobilitie. We are as excited about the towers as we are about the rest of the portfolio of Mobilitie.”
Elaborating on Mobilitie’s appeal, Leprince pointed to the opportunity for growth that the acquisition represents.
“For me, it’s growing the portfolio that Mobilitie has, including venues, small cells and towers, and deploying the contract dimension,” Leprince said. “For example, the contract for the San Francisco Bay Area is one that will be deployed in the years to come. The interesting thing is the fact that we can boost the growth of this portfolio outside the United States, using our presence and experience in the UK, Europe, Australia, Canada and Hong Kong.”
The BAI Communications executive said that the company is a strong believer in the power of private networks, another reason the Mobilitie acquisition is appealing.
“Private networks are to some extent not too different from some of the big venues that BAI and Mobilitie have deployed,” Leprince said. “So I think that might be the ‘gem’ from this acquisition, the growth trajectory that Mobilitie has, but with the additional growth that the combination with BAI could bring. That’s what we’re excited about.”
In the transaction, a Los Angeles-based private equity firm, Shamrock Capital, would be selling its ownership stake in Mobilitie to BAI Communications. According to Shamrock, it previously invested $100 million in equity capital with Mobilitie.
Gary Jabara, founder and chairman at Mobilitie, said, “Mobilitie has grown exponentially following Shamrock’s investment in 2013, providing the financial support required to scale nationally and fuel our expansion into 5G. Together, we have firmly established Mobilitie’s position as the market leader in 5G wireless infrastructure and have the foundation needed to accelerate our impact on a global scale. We’re excited for the next chapter of our growth as part of BAI Communications.”
Canada Pension Plan Investment Board, known as CPP Investments, owns 86 percent of BAI Communications, which has its official headquarters in Chatswood, New South Wales, Australia, and assets in the United States, the United Kingdom, Australia, Canada and Hong Kong. The company grew from a business known as Broadcast Australia, which today delivers 126 million broadcast hours to 99 percent of the Australian population and which remains a significant part of the BAI Communications group of companies.
CPP Investments’ head of portfolio value creation and non-executive director on the BAI Communications board of directors, Max Biagosch, said, “This acquisition is an exciting and dynamic move for the BAI business and represents an attractive opportunity for CPP Investments to increase its financial commitments and generate long-term sustainable returns for our contributors and beneficiaries. It is a true enhancement of our broader portfolio, extending our investment in digital infrastructure, which is critical to people and communities around the world as our lives become increasingly dependent on connectivity.”
In Leprince’s view, there is more to come for BAI Communications.
“The deals with Transport for London and with Mobilitie demonstrate our ambition for growth and becoming a leader in 5G neutral host infrastructure,” he said. (See “London Selects BAI Communications for Neutral-host Communications Infrastructure Concession.”)
“We don’t want to stop here,” Leprince said. “We want to focus on delivering on these deals, delivering on these organic and non-organic wins. In addition, we want to continue to push more. We are fortunate to have ambitious and supportive shareholders. We want to continue to drive this neutral-host solution for mobile network operators in small cells, venues, private networks, smart cities and fiber, and drive our transit communications business. What we have done is only the tip of the iceberg. There’s so much more than we can do for mobile network operators and transit agencies.”