ITEM 1.01
|
ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
|
Merger Agreement
On July 18, 2017, Crown Castle International Corp. (the Company or Crown Castle) entered into an Agreement and
Plan of Merger (the Merger Agreement) with LTS Group Holdings LLC (Lightower), Berkshire Fund VII-A (LTS) Acquisition Partners, Berkshire Fund VIII-A (LTS) Acquisition Partners, LTS Berkshire Fund VII-A Blocker Corporation,
LTS Berkshire Fund VIII-A Blocker Corporation, LTS Co-Invest Blocker LLC, LTS Co-Invest Blocker II LLC, LTS Rollover Blocker LLC, LTS BF VII-A Blocker Merger Sub, Inc., LTS BF VIII-A Blocker Merger Sub, Inc., LTS Co-Invest Blocker Merger Sub, Inc.,
LTS Co-Invest Blocker II Merger Sub, Inc., LTS Rollover Blocker Merger Sub, Inc., LTS Group Holdings Merger Sub, Inc. and BSR LLC, as equityholders representative, pursuant to which the Company has agreed to acquire all of the outstanding
equity interests in Lightower in a series of related transactions (the Acquisition).
Under the terms of the Merger Agreement,
the Company will pay a purchase price of approximately $7.1 billion in cash, subject to certain limited adjustments. Completion of the Acquisition is subject to customary closing conditions, including (i) the absence of certain government
proceedings or litigation related to the Acquisition, (ii) the receipt of governmental approvals with respect to the expiration or termination of any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and
(iii) the attainment of certain regulatory approvals from the Federal Communications Commission, applicable state public service or public utilities commissions and certain local franchise authorities. Completion of the Acquisition does not
require the approval of Crown Castles stockholders and is not conditioned upon Crown Castles ability to obtain acquisition financing. The Company intends to finance the Acquisition consistent with maintaining its current investment grade
credit metrics, utilizing cash on hand and equity and debt financing, including borrowings under its revolving credit facility. The Company anticipates the Acquisition will be completed by the end of 2017.
The parties have made customary representations, warranties and covenants in the Merger Agreement, including the use of commercially
reasonable efforts to cause the consummation of the Acquisition. The Merger Agreement contains certain termination rights for both Crown Castle and Lightower and further provides that, upon termination of the Merger Agreement under certain specified
circumstances if certain regulatory approvals have not been obtained, Crown Castle will be required to pay Lightower a termination fee of $100 million. In addition, the Merger Agreement provides that, under certain circumstances, Crown Castle will
be required to pay Lightower additional consideration in the event that the closing date of the Acquisition occurs after December 31, 2017.
The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full
text of the Merger Agreement, which is filed as Exhibit 2.1 hereto and incorporated herein by reference. The representations and warranties and the covenants in the Merger Agreement were made solely for the benefit of the parties to the Merger
Agreement for the purpose of allocating contractual risk between those parties and do not establish such matters as facts. Investors should not rely on the representations and warranties and the covenants as characterizations of the actual state of
facts or condition of the Company, Lightower or any of their respective subsidiaries or affiliates.
Bridge Facility Commitment Letter
In connection with entering into the Merger Agreement, Crown Castle entered into a commitment letter (the Bridge Facility Commitment
Letter), dated July 18, 2017, with Morgan Stanley Senior Funding, Inc., Bank of America, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (such financial institutions being referred to collectively as the
Commitment Parties), pursuant to which the Commitment Parties have committed (the Bridge Facility Commitment) to provide up to $7.1 billion in senior unsecured bridge loans (the Bridge Facility) to ensure
financing for the Acquisition and to pay related fees and expenses. Crown Castle will only borrow under the Bridge Facility in connection with the Acquisition to the extent Crown Castle does not consummate its currently expected financing plans.
The Bridge Facility Commitment Letter contains, and the credit agreement in respect of the Bridge
Facility, if any, is expected to contain, certain customary conditions to funding. Crown Castle will pay certain customary commitment fees and, in the event it makes any borrowings, funding and other fees in connection with the Bridge Facility
Commitment.
The foregoing descriptions of the Bridge Facility Commitment Letter, the Bridge Facility Commitment and the Bridge Facility
do not purport to be complete and are qualified in their entirety by reference to the full text of the Bridge Facility Commitment Letter, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
Amendment Backstop Commitment Letter
In
connection with Crown Castles currently expected financing plans, Crown Castle also entered into a commitment letter (the Amendment Backstop Commitment Letter), dated July 18, 2017, with the Commitment Parties, pursuant to
which the Commitment Parties have committed (the Amendment Backstop Commitment) to provide a backstop senior unsecured credit facility (the Amendment Backstop Facility), consisting of a revolving credit facility
having aggregate commitments of $1.75 billion and a term loan facility in an aggregate principal amount equal to the aggregate principal amount of the term loans under our existing credit agreement, which facility will be available to Crown Castle
if (i) certain of Crown Castles current financing plans are not completed (or result in aggregate net cash proceeds significantly less than expected) and (ii) we are unable to obtain the requisite consents from lenders under our
existing credit agreement to effect an amendment to our existing credit agreement to, among other things, modify certain financial maintenance covenants therein to accommodate the Acquisition. The proceeds of borrowings under the Amendment Backstop
Facility, if any, will be used to prepay all outstanding borrowings under our existing credit agreement and, following any such prepayment, we will to terminate our existing credit agreement.
The Amendment Backstop Commitment Letter contains, and the credit agreement in respect of the Amendment Backstop Facility, if any, is expected
to contain, certain customary conditions to funding. Crown Castle will pay certain customary commitment fees and, in the event it makes any borrowings, funding and other fees in connection with the Amendment Backstop Commitment.