After assessing offers from financial and strategic buyers, pure-play tower company Crown Castle (NYSE: CCI) has agreed to sell all of its fibre segment to EQT Active Core Infrastructure Fund and Zayo Group Holdings Inc. for US$8.5 billion in total.
Subject to certain conditions and regulatory approvals, the transaction is expected to close in the first half of 2026.
Crown Castle expects to use the cash proceeds to repay existing debt and fund anticipated share repurchases.
This is expected to position the company to maintain an investment grade credit rating while instituting a share repurchase program of around US$3.0 billion.
The company expects the transaction to enhance value for shareholders and prepare the business for long-term success as a focused, pure-play U.S. tower company.
Management believes its U.S. tower portfolio has some of the best geographical characteristics in the industry and expects the business to benefit from the multi-decade trend toward greater network densification.
Following the close of today’s announced transactions, Crown Castle believes it will be able to grow its annualised dividend in-line with the growth in AFFO excluding the amortisation of prepaid rent per share.
Yesterday’s decision to sell-down its fibre solutions business coincided with the Houston-based company’s announced FY24 results in which organic growth in towers was up 4.5%.
Crown Castle’s CEO Steven Moskowitz told the market to expect consistent growth levels in 2025.
He expects the company to benefit from the anticipated consistent growth in mobile data demand as it continues to unlock additional value by pursuing initiatives that enhance customer service, revenue growth, capital discipline, and operational excellence.
“To increase free cash flow generation and financial flexibility, we are updating our capital allocation framework, which is anticipated to result in a reduction to our annualised dividend to approximately $4.25 per share in the second quarter of 2025, and the expected implementation of an approximately $3.0 billion share repurchase program following the closing of the transaction,” said Moskowitz.
“We believe this capital allocation framework can provide an attractive combination of near-term capital return, flexible share repurchases, and long-term financial flexibility to pursue growth opportunities in the future."
