BAI Communications (BAI), a provider of distributed antenna systems (DAS) for transit operators, today announced the acquisition of Mobilitie, an owner of small cells, distributed antenna systems (DAS), and towers, alongside an incremental commitment to BAI of $2.0bn USD ($2.4bn Canadian dollars) from the Canada Pension Plan Investment Board (CPP Investments) and Alberta Investment Management Corporation (AIMCo).

BAI Communications’ standalone acquisition of Mobilitie is estimated to have a transaction value of $1.3bn+ USD. Notably, Mobilitie is being sold by Shamrock Capital Advisors, a private equity fund, who first invested in the company in 2013 through its Shamrock Capital Growth Fund III. Finally, the BAI Communications and Mobilitie transaction is expected to close in Q3 2021.

BAI Communications (BAI) – Acquirer Overview

BAI Communications (BAI) owns distributed antenna systems (DAS) which provide cellular and Wi-Fi service in the major subways of New York, Toronto, and Hong Kong. Specifically, these subway system projects are for the Toronto Transit Commission (TTC) in Toronto, Metropolitan Transportation Authority (MTA) in New York, and the Mass Transit Railway (MTR) in Hong Kong. Notably, in the United States, BAI owns a majority stake in Transit Wireless.

Additionally, the company owns and operates a transmission network in Australia, delivering 59 million broadcasting hours for the country’s national broadcasters.

Overall, BAI Communications designs, builds, and operates cellular, Wi-Fi, broadcast, radio, and IP networks through long-term partnerships. The company’s customers include broadcasters, transit operators, governments, and wireless carriers.

Mobilitie – Target Overview

Mobilitie owns a significant portfolio of digital infrastructure in the United States. Specifically, the company operates distributed antenna systems (DAS) at 220 venues, across 39 states and 10.0k small cells, in 45 states. Additionally, Mobilitie owns 300 tower sites, throughout 14 states.

Mobilitie offers its neutral-host indoor and outdoor infrastructure at venues including stadiums, arenas, amphitheaters, commercial real estate, hotels, convention centers, hospitals, medical centers, university & college campuses, and transit systems.

For example, Mobilitie provides wireless communications to public transit systems in Seattle and the San Francisco Bay Area.

Transaction Rationale – BAI Communications and Mobilitie

BAI Communications’ acquisition of Mobilitie represents a significant expansion of its North American business and brings together complementary service offerings. Indeed, the combination will improve BAI and Mobilitie’s positioning for 5G infrastructure, transit infrastructure, and its international presence.

5G Infrastructure

The BAI Communications and Mobilitie tie-up will improve their capabilities in 5G indoor and outdoor wireless infrastructure, small cell deployments, and services for transit operators across major U.S. cities. Additionally, the combined company will have increased scale and relationships with large venue operators and wireless carriers in the U.S. In particular, the company’s 5G services will be important for winning smart city contract opportunities.

Transit Infrastructure

BAI Communications and Mobilitie will become an increasingly relevant provider of public transit wireless connectivity solutions in North America. In turn, the company will be better equipped to compete on digital infrastructure projects in dense urban and transit environments. As an example, BAI competes with companies like Boingo Wireless, who themselves have access to significant funding from Digital Colony.

International Presence

BAI Communications and Mobilitie will position the business to increase their services for telecommunications operators and municipalities in the U.S. and international markets. Particularly, these international expansions will be in the UK and Continental Europe.

Ownership – CPP Investments and AIMCo

Canada Pension Plan Investment Board (CPP Investments) is BAI’s majority shareholder, with an 86% ownership interest. Additionally, Alberta Investment Management Corporation (AIMCo) is a minority shareholder in BAI.

CPP Investments and AIMCo will use their $2.0bn USD ($2.4bn Canadian dollars) follow-on commitment to support BAI Communications’ global growth strategy, acquisitions (including Mobilitie), and new partnerships. Indeed, this includes BAI’s new partnership with Transport for London (TfL) in the UK.

Transaction Advisors – BAI Communications, Mobilitie, and Shamrock

BAI Communications’ financial advisor was J.P. Morgan. Additionally, BAI Communications’ legal advisor was Latham & Watkins.

Mobilitie’s financial advisor was Morgan Stanley. Additionally, Mobilitie’s legal advisor was Goodwin Procter.

Shamrock Capital’s legal advisor was Cooley.

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