Verizon signs $3.3 billion wireless deal with infrastructure company Vertical Bridge

By Jaspreet Singh

(Reuters) – Verizon Communications will give infrastructure company Vertical Bridge the right to lease, operate and manage thousands of cell towers for $3.3 billion, it said on Monday, freeing up more money for the U.S. wireless carrier to strengthen your network.

The deal, which includes 6,339 towers in all 50 states and Washington DC, includes upfront cash proceeds of $2.8 billion. The towers will be leased back to Verizon for 10 years, with the option to extend the term up to 50 years.

The deal is expected to close by the end of 2024 and would help Verizon in its efforts to reduce costs associated with the towers.

“This fits with the global trend of mobile operators divesting their owned and operated towers. “But it is also a recognition that towers are generally worth more in the hands of independent operators because they can more easily lease the space on the towers to multiple tenants,” said MoffettNathanson analyst Craig Moffett.

In 2019, competitor AT&T signed a sale-leaseback agreement worth up to $680 million for around 1,000 cell towers with private equity firm Peppertree Capital Management.

Verizon, which will retain ownership of those towers, already has a tie-up with Vertical Bridge under which the infrastructure company plans to build towers with the wireless carrier as an anchor tenant.

Vertical Bridge has more than 500,000 locations in the United States, including cell towers and towers. There are also partnerships with companies such as AT&T and T-Mobile US.

“(This deal) positions us to capitalize on the growing demand for wireless infrastructure, particularly as AI-driven technologies and 5G continue to transform connectivity needs across industries,” said Marc Ganzi, vice chairman of Vertical Bridge.

Asset manager DigitalBridge, which is the majority owner of Vertical Bridge, and Canada's second-largest pension fund CDPQ would provide capital to support the deal.

Verizon announced earlier this month that it would buy fiber-optic internet provider Frontier Communications in a deal valued at $20 billion in cash.

(Reporting by Jaspreet Singh in Bengaluru; Editing by Shilpi Majumdar)