LCC International Inc. to Acquire Koll Telecommunication Services
MCLEAN, Va.--(BUSINESS WIRE)--May 27, 1998--
Transaction creates one of the largest pools of
multi-tenantable towers in United States
LCC International Inc., the world's largest wireless telecommunications consulting and RF engineering firm, Wednesday announced that it has executed letters of intent to complete a redemption transaction whereby LCC will ultimately acquire 100 percent of the membership interest in Koll Telecommunication Services, LLC (KTS).
The combination of LCC's tower ownership and management subsidiary, Microcell Management Inc. and KTS' tower management business will create one of the largest pools of towers available through one company according to published industry reports.
KTS, one of the wireless industry's leading telecommunication tower management companies, also brings a strong portfolio of network implementation services as well as a strong customer base to LCC.
"It is not just by chance that LCC has become one of the leaders in the domestic tower business and is expanding that leadership into the international marketplace," said Dr. Geoffrey S. Carroll, president and chief executive officer of LCC International Inc. "We have been strategically planning for some time to give customers a compelling reason for coming to us for their tower solutions.
"In addition to the 900 sites that KTS currently represents, LCC has more than 100 towers that are revenue producing, in process of construction or under contract. This positions LCC as one of the rapidly emerging leaders in the domestic tower ownership and management business."
Carroll continued, "We are offering all of these assets in combination with our design, optimization and deployment services to our customers as part of our business plan to focus their attention on ways to positively impact their balance sheet through the outsourcing of those non-core activities."
LCC has concentrated on building, owning and managing these assets while KTS has built a business on leasing them for carriers. KTS' program management services will merge with LCC's services to strengthen the company's tower implementation programs across the board in site acquisition, zoning, leasing and construction management.
Under the terms of the acquisition, LCC will continue to operate the KTS office in Mission Viejo, Calif., which will serve as a hub for all LCC's customers on the West Coast.
Carroll continued, "With the acquisition of KTS, we will have increased the size of our Program Management business in excess of 50 percent, we will have eliminated a formidable competitor and acquired our first West Coast office which will benefit all LCC businesses. From this point forward, our Program Management business will operate as KTS, a wholly-owned subsidiary of LCC."
In recent years, the wireless industry has embraced the concept of outsourcing the ownership and management of the tower facilities on which their cell sites are located so they can better focus on servicing their customers. Wireless operators around the globe who outsource their tower siting and management service options have documented reductions in the cost of their operations.
According to an industry analysis by Dean & Company, a telecommunications consulting firm based in Vienna, Va., outsourcing in general can save U.S. wireless operators in aggregate between $2 billion and $3 billion annually.
Mike McNelly will continue his role as president of KTS and will join LCC as a senior vice president. Prior to founding KTS in 1994, McNelly was executive vice president of Engineering and Operations at Los Angeles Cellular Telephone Company (LACTC) where he was responsible for the build-out, construction, operation and maintenance of one of the largest digital cellular networks in the world.
Carroll commented, "Mike brings to LCC many years of operations experience, and a track record of proven success in network deployment services. By adding Mike to our senior management team, we add the valuable perspective of a former customer and over 15 years of wireless industry experience."
Prior to the acquisition, LCC owned 33.3 percent of KTS' membership interests, Castle Rock Telecommunications Co., LLC (CRT) held 36.6 percent of KTS' membership interest, and Koll Management Services Inc. (KMS), held the remaining 29.9 percent.
In the transaction, KTS will redeem the ownership interests of KMS in exchange for KMS' assumption of certain contract rights and associated assets and liabilities.
KTS will also redeem the membership interests of CRT in exchange for an earn-out agreement entitling CRT to 40% of the pre-tax income, after certain adjustments, derived by KTS from its existing contracts. Structured in this manner, the acquisition is expected to be non-dilutive. |
