Parallel Infrastructure, a build-to-suit (BTS) tower operator in the United States, which is backed by Apollo Global Management, through the vehicle Apollo Infrastructure Opportunities Fund II (AIOF II), is one of the largest privately-held independent tower companies in the United States. Beyond Parallel Infrastructure’s 500+ macro cell towers in operation, the company has “several hundred more under development”, bringing its total tower portfolio to 1.0k+ sites in the United States.

Below Dgtl Infra reviews the background to Apollo’s acquisition of Parallel Infrastructure. Following this context, we analyze Parallel Infrastructure’s latest available tower portfolio information to understand how the company is positioning itself to serve U.S. wireless carriers with tower infrastructure.

History – Apollo Global Buys Parallel Infrastructure from Lendlease

Parallel Infrastructure, under its previous iterations, has been backed by Fortress Investment Group (2014 to 2017), Lendlease (2017 to 2020), and Apollo Global Management, via the Apollo Infrastructure Opportunities Fund II (AIOF II), from 2020 to present.

Transaction

In October 2020, Apollo’s AIOF II, using the entity Thor Parent Holdings, LLC, acquired 100% of Lendlease (US) Telecom Holdings LLC from Lendlease Group, an Australian real estate investor, for consideration of ~$280m USD (A$390m). Subsequently, Lendlease’s telecom unit was rebranded by Apollo back to its original Parallel Infrastructure name.

At the time, Parallel Infrastructure disclosed that it had “over 450 towers” or “nearly 500 macro cell towers” – meaning ~475 towers – across the United States. Additionally, Parallel Infrastructure had a further 350+ towers either under contract or in late-stage development.

Management

Parallel Infrastructure is led by Yannis Macheras as CEO, who has been with the company since its founding. Prior to Parallel, Macheras spent over 14 years at American Tower, most recently as its Vice President, Latin America.

Parallel Infrastructure – Tower Portfolio

Parallel Infrastructure currently states that it has an existing 1.0k+ tower portfolio, which includes both operational and development sites. Incorporating owned and managed sites, Parallel Infrastructure’s portfolio rises to 2.0k sites across 41 states.

Per Dgtl Infra’s review of Federal Communications Commission (FCC) data, Apollo’s Parallel Infrastructure owns antenna structures registered under the following entities:

  • Parallel Infrastructure III, LLC
  • PI Telecom Infrastructure, LLC
  • PI Tower Development, LLC

As shown below, these entities comprise 839 of Parallel Infrastructure’s reported 1.0k+ owned tower portfolio – with the difference possibly arising from towers held by additional entities.

Parallel Infrastructure’s constructed tower portfolio spans 38 states, primarily in the Midwest, Southeast, and West regions of the United States. Additionally, the company has been granted permission to build towers in a further 3 states but has not yet constructed these towers.

Across the entities identified above, Parallel Infrastructure has a total of 583 sites which are constructed and 256 sites which are granted, but not constructed. Therefore, in Parallel’s 41 total states of operation, the company has 839 potential sites, which includes both constructed and granted towers.

Tower Portfolio by U.S. Region

RegionConstructedGrantedTotal% Total
Midwest27615242851%
Southeast1015615719%
West962512114%
Southwest881610412%
Northeast227293%
Total583256839100%

Geographically, Parallel Infrastructure’s top five states by constructed sites are Illinois (81 sites), Texas (69 sites), Missouri (58 sites), Indiana (34 sites), and Michigan (30 sites). Collectively, these five markets comprise 272 towers, equivalent to 47% of the company’s constructed sites.

Additionally, Parallel Infrastructure has meaningful potential to grow in the states of Illinois (38 granted sites), Missouri (24 granted sites), Wisconsin (24 granted sites), and Michigan (23 granted sites).

Top 10 States by Total Sites (i.e., Constructed and Granted)

StateConstructedGrantedTotal% Total
Illinois813811914%
Texas69158410%
Missouri58248210%
Michigan3023536%
Indiana3417516%
Wisconsin2524496%
Kansas2813415%
Florida2516415%
Washington295344%
Virginia2311344%

As shown above, Illinois and Texas are key markets for Parallel Infrastructure, with 14% and 10%, respectively, of the company’s constructed and granted towers residing in these states. Interestingly, Texas is also a market where barriers to entry for tower construction are lower than in other states – particularly as it relates to zoning and permitting.

Contractual Rights

Parallel Infrastructure owns 65k miles of railroad corridor rights-of-way enabling the company to extend its tower management/leasing capabilities to railroad operator-owned infrastructure. Also, the company has access to 200+ military bases in the United States through which it facilitates connectivity services for wireless carriers.

Customers

Parallel Infrastructure primarily serves the United States’ largest wireless carriers including Verizon, T-Mobile, and AT&T, under long-term contracts. Additionally, in February 2021, DISH Network signed an agreement with Parallel Infrastructure for the use of its towers as part of its 5G network build-out.

Apollo Infrastructure Opportunities Fund II (AIOF II) – Parallel Infrastructure

Parallel Infrastructure is backed by the Apollo Infrastructure Opportunities Fund II (AIOF II), which itself closed in January 2022 with $2.54bn in capital commitments. AIOF II targets investing in mid-market infrastructure assets primarily across the sectors of communications, power & renewables, and transportation.

As of Q3 2021, Apollo’s AIOF II has made total equity commitments of $416.9m which includes Parallel Infrastructure and a fiber-based carrier in the western United States called FirstDigital Telecom.

Separately, Apollo Investment Fund IX, another private equity vehicle, owns Brightspeed which plans to pass 3+ million consumer and business locations with fiber-to-the-premises (FTTP) following its $7.5bn acquisition of Lumen Technologies’ incumbent local exchange carrier (ILEC) operations in 20 states.

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