Landmark Infrastructure Partners LP (NASDAQ: LMRK) today announced it has agreed to be acquired by its sponsor, Landmark Dividend LLC, which is owned by DigitalBridge (originally Digital Colony), for $16.50 per common unit. Notably, in June 2021, Digital Colony Management completed the acquisition of Landmark Dividend LLC, while also gaining a 13.2% ownership in Landmark Infrastructure Partners LP’s common units. DigitalBridge’s revised $16.50 per common unit offer for Landmark tops Melody Investment Advisors’ $16.25 per common unit proposal earlier this month.

Overall, DigitalBridge will pay $16.50 in cash for each common unit owned by unaffiliated unitholders (i.e., those not already owned by DigitalBridge) of Landmark Infrastructure Partners LP. As a result, Landmark Dividend intends to acquire Landmark Infrastructure Partners LP. Indeed, this $16.50 per common unit price represents a:

Valuation – Landmark Infrastructure Partners

In early August 2021, Melody Investment Advisors’ $16.25 per common unit offer valued Landmark Infrastructure Partners’ common equity at $414m. Incorporating the company’s net debt, preferred units, and noncontrolling interests of ~$642m, Landmark’s enterprise value equated to $1.06bn.

Based on DigitalBridge’s revised $16.50 per common unit offer, Landmark Infrastructure Partners’ common equity value is $421m. Additionally, factoring-in the company’s net debt, preferred units, and noncontrolling interests of ~$642m, Landmark’s enterprise value also equates to $1.06bn.

Overall, DigitalBridge’s revised proposal nets Landmark’s common unitholders slightly more, providing $6.4m of additional value, as compared to Melody Investment Advisors’ prior offer.

Enterprise Value / EBITDA

During Q2 2021, Landmark Infrastructure Partners generated adjusted EBITDA of $17.6m, which on an annualized basis, equates to $70.5m. Therefore, DigitalBridge is valuing Landmark Infrastructure Partners at 15.1x adjusted EBITDA.

Transaction Structure – Landmark Infrastructure

DigitalBridge-controlled Landmark Dividend LLC owns 100% of the General Partner (GP) for Landmark Infrastructure Partners LP. Additionally, recall that in June 2021, both Steven Sonnenstein, a Senior Managing Director of DigitalBridge, and Sadiq Malik, a Managing Director at DigitalBridge, were appointed to the board of directors of the General Partner.

As a result, if the proposed transaction by DigitalBridge is not consummated as expected, Landmark Dividend LLC will continue operating Landmark Infrastructure Partners LP in its role as the General Partner. Moreover, Landmark Dividend LLC is not considering third party offers for Landmark Infrastructure Partners LP or its assets. Effectively, whether or not today’s acquisition of Landmark Infrastructure Partners LP progresses, the company will remain under DigitalBridge’s control.

Finally, DigitalBridge expects to close the transaction in 2021. Upon completion of the transaction, DigitalBridge intends to fund a portion of the consideration with debt from Truist Securities (lead arranger), Citizens Bank, RBC Capital Markets, and TD Securities.

Transaction Advisors – DigitalBridge

DigitalBridge’s financial advisors were TAP Advisors and RBC Capital Markets. Additionally, DigitalBridge’s legal advisors were Simpson Thacher & Bartlett and Latham & Watkins.

Landmark’s Conflicts Committee’s financial advisor was Evercore. Additionally, the Conflicts Committee’s legal advisor was Gibson, Dunn & Crutcher.

Adam Simmons covers Towers for Dgtl Infra, including American Tower (NYSE: AMT), Crown Castle (NYSE: CCI), SBA Communications (NASDAQ: SBAC), Cellnex Telecom (BME: CLNX), Vantage Towers (ETR: VTWR), IHS Holding (NYSE: IHS), and many more. Within Towers, Adam focuses on the sub-sectors of ground-based cell towers, rooftop sites, broadcast / radio towers, and 5G. Adam has over 7 years of experience in research and writing for Towers.


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