SBA Communications Corporation Board Approves REIT Conversion
October 03 2016 - 4:01PM
SBA Communications Corporation (NASDAQ:SBAC) (“SBA”) announced
today that its Board of Directors has authorized SBA to take all
necessary steps for it to qualify as a real estate investment trust
(“REIT”) for tax purposes. SBA intends to elect to be taxed
as a REIT commencing with its taxable year ending December 31,
2016.
“We are pleased to announce this plan for conversion because we
believe REIT status is the optimal structure for our business given
the real estate nature of our assets,” stated Jeffrey A. Stoops,
SBA’s President and Chief Executive Officer. “We believe a
REIT structure will provide many opportunities for creating
long-term shareholder value. We have been working on this
plan for approximately two years. We expect our conversion to
a REIT to have little to no effect on our operations, as we have
been operating in compliance with REIT rules since prior to the
beginning of 2016. We intend to continue our focus on
maximizing long-term adjusted funds from operations per share
through growth and disciplined capital allocation.”
In connection with its REIT conversion, SBA proposes to merge
with and into a newly formed, wholly owned subsidiary to ensure the
effective adoption of certain charter provisions that implement
standard REIT-related ownership limitations and transfer
restrictions related to its capital stock. SBA expects to hold a
special meeting of shareholders in the fourth quarter of 2016 for
the purpose of voting on the proposed merger. SBA will file a proxy
statement/prospectus on Form S-4 with the Securities and Exchange
Commission, which will describe the merger and REIT
conversion. The REIT election is subject to the completion of
all necessary steps of the aforementioned conversion
plan.
SBA’s determination as to the timing and amount of future
dividend distributions will be based on a number of factors,
including REIT distribution requirements, investment opportunities
around its core business and its existing federal net operating
losses (“NOLs”) of approximately $1.15 billion as of December 31,
2015. SBA may use these NOLs to offset its REIT taxable
income, and thus any required distributions to shareholders may be
reduced or eliminated until such time as the NOLs have been fully
utilized. SBA does not expect that it will be required to
make any distribution of accumulated earnings and profits (commonly
referred to as a “purging” dividend) in connection with its REIT
conversion.
Principal advisors to SBA related to the REIT conversion are
Skadden, Arps, Slate, Meagher & Flom LLP and Greenberg Traurig,
P.A. SBA has received an opinion from Skadden, Arps, Slate,
Meagher & Flom LLP that SBA will qualify as a REIT as of
January 1, 2016.
About SBA Communications Corporation
SBA Communications Corporation is a first choice provider and
leading owner and operator of wireless communications
infrastructure in North, Central and South America. By “Building
Better Wireless”, SBA generates revenue from two primary
businesses—site leasing and site development services. SBA’s
primary focus is the leasing of antenna space on its multi-tenant
towers to a variety of wireless service providers under long-term
lease contracts.
Information Concerning Forward-Looking
Statements
This press release includes forward-looking statements,
including statements regarding SBA’s plans, projections and
estimates regarding (i) its intention to elect REIT status and the
timing and effect of that election, (ii) the potential advantages,
benefits and impact of, and opportunities created by, electing REIT
status and (iii) its intention to continue its focus on maximizing
long-term adjusted funds from operations per share through growth
and disciplined capital allocation. These forward-looking
statements may be affected by the risks and uncertainties in SBA’s
business. This information is qualified in its entirety by
cautionary statements and risk factor disclosures contained in
SBA’s Securities and Exchange Commission (SEC) filings, including
SBA’s annual report on Form 10-K filed with the SEC on February 26,
2016.
SBA wishes to caution readers that certain important factors may
have affected and could in the future affect SBA’s actual results
and could cause SBA’s actual results for subsequent periods to
differ materially from those expressed in any forward-looking
statement made by or on behalf of SBA, including, but not limited
to (1) that REIT qualification involves the application of highly
technical and complex provisions of the Internal Revenue Code of
1986, as amended, as well as various factual determinations not
entirely within SBA’s control and that SBA may fail to qualify as a
REIT for the taxable year ending December 31, 2016, and, even if
SBA does qualify as a REIT, it may be unable to maintain that
qualification, (2) whether the proposed REIT-related ownership and
transfer restrictions will be adopted, (3) changes in legislation,
the Treasury regulations, or Internal Revenue Service
interpretations that could adversely impact SBA’s ability to elect
to be taxed as a REIT or the benefits of being a REIT and (4) the
ability of SBA to realize the anticipated advantages and benefits
of electing REIT status, including a potential reduction in cost of
capital and the ability to expand its shareholder base. While SBA
currently intends to elect to be taxed as a REIT commencing with
its taxable year ending December 31, 2016, SBA reserves the right
to cancel or defer the REIT election or the merger, if the SBA
board of directors determines that the REIT election or the merger
is no longer in the best interests of SBA and its shareholders.
Additional Information
In connection with the proposed REIT conversion, SBA plans to
effect a merger with and into a wholly owned subsidiary of SBA
called SBA Communications REIT Corporation. SBA will file a proxy
statement to be used in connection with the shareholder vote on
this merger. That proxy statement will be contained in a
registration statement on Form S-4 to be filed by SBA
Communications REIT Corporation, and both companies will file other
relevant documents concerning the proposed merger transaction with
the SEC. INVESTORS ARE URGED TO READ THE FORM S-4 AND PROXY
STATEMENT (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) WHEN
THEY BECOME AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH
THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED MERGER. You will be able to obtain documents free of
charge at the website maintained by the SEC at www.sec.gov. In
addition, you may obtain documents filed with the SEC by SBA free
of charge by contacting Investor Relations, SBA Communications
Corporation, 8051 Congress Avenue, Boca Raton, FL 33487,
(800) 487-7483, or you may visit the investor relations section of
our website at http://ir.sbasite.com for copies of any such
document.
SBA, its directors and executive officers and certain other
members of management and employees may be deemed to be
participants in the solicitation of proxies from SBA’s
shareholders. Information regarding the persons who may, under the
rules of the SEC, be considered participants in the solicitation of
proxies will be included in any related proxy statement.
Information about directors and executive officers of SBA and their
ownership of SBA stock is set forth in the proxy statement for
SBA’s 2016 Annual Meeting of Shareholders. Investors may obtain
additional information regarding the interests of such participants
by reading the proxy statement if and when it becomes
available.
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval.
Your Signal Starts Here.
Contacts:
Mark DeRussy, CFA
Capital Markets
561-226-9531
Lynne Hopkins
Corporate Communications
561-226-9431
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