SARASOTA COUNTY -- Global Signal Inc. is being bought for $5.7 billion in Southwest Florida's largest-ever business deal.
That is $3.9 billion in stock and the assumption of $1.8 billion in debt for the telecommunications tower owner and operator based on Fruitville Road in Sarasota County.
The only deal that comes even close was PepsiCo Inc.'s purchase of Tropicana Products Inc. in 1998 for $3.3 billion.
The buyer, Houston's Crown Castle International Corp., is uniting the second- and third-largest operators of communications towers in the United States.
Together the two companies will have more than 24,000 wireless sites.
"Scale in and of itself is no reason to do any combination of tower companies," said John P. Kelly, Crown Castle's chief executive, in a Friday conference call with analysts. "Towers for the sake of towers was of no interest to us. They just happened to have more towers in the top 100 BTA's (basic trading areas) than we did."
The $55.95-per-share price being paid for Global Signal represents an 11.6 percent premium on the company's closing stock price of $50.10 on Thursday.
Its shareholders will get 1.61 Crown Castle shares for every share of Global Signal they own, or they can choose a cash payment of $55.95.
Global Signal's shares were selling for $53.94 at the close of regular trading on Friday, up $3.84, or about 7.7 percent.
The tower industry has been consolidating after many of its players aggressively acquired towers and expanded during the high-technology boom of the late 1990s and early 2000s.
Global Signal's predecessor company, Pinnacle Holdings Inc., had financial problems, eventually filing for bankruptcy, then being bought by a Wall Street firm and relaunched in a new initial public offering of stock.
It was unclear Friday of the impact that the Crown Castle deal would have on the company's local operations. Global Signal officials did not return calls seeking comment.
Global Signal employs 293, though not all of those jobs are in Southwest Florida.
"There's no question this was the largest deal ever in this area," said Kerry Kirschner, executive director of Sarasota's Argus Foundation. "It doesn't look like it's going to help us much in terms of local employment.
"In fact, we'll probably lose jobs because of this. Accounting and headquarters support staff will go away."
On the other hand, Global Signal officers stand to make a lot of money, and they may spend it here if they stay, Kirschner said.
If the acquisition is completed as planned in the first quarter of 2007, shares held by Global Signal's top eight executives will be worth $42.5 million.
Shares held by David Grain, the company's former president who still lives in Sarasota, will be worth $34.6 million.
"The guy that's got to be kicking himself is the company's treasurer -- Thomas Guard," Kirschner said. "He sold 85,000 shares at around $44 dollars a share in August. That means he left about $1 million on the table."
Guard still owns 36,113 shares that will be worth $2 million once the deal is done, insider records maintained by the Securities and Exchange Commission show.
But the biggest winner of all will be Fortress Investment Holdings, the New York-based investment company presided over by Global Signal Chairman Wesley Edens.
Fortress controls 30.4 million shares, or 43 percent of Global Signals shares now worth $1.7 billion.
In general, Wall Street seemed to like Crown Castle's move.
"This is a positive development in that shareholders will get a 12 percent premium over yesterday's close," said Clayton Moran, an analyst with the Boca Raton's Stanford Group. "I felt the stock price would have advanced past that 12 months from now, but it's not a bad price.
"In terms of the rest of the sector the deal is also positive, because it furthers the consolidation trend we've already seen and increases the likelihood of further acquisitions. I would say that SBA Communications, which is also based here in Florida, is the most likely tower company to be acquired next."
Moran challenged a statement made by J.P. Morgan Chase analyst Thomas Lee during a conference call Friday morning that the big three publicly traded tower companies now control 60 percent of the free standing towers in the market.
"The number is more like 40 percent, which means there is plenty of room for consolidation," Moran said. "I believe consolidation will continue for the next several years."
Crown Castle's shares were selling for $33.10 at the close of regular trading on Friday, down $1.65.
"It's predictable that Crown Castle's stock would be down a little," said Seth Potter, an analyst with Punk Ziegel & Co. in New York.
"If the market thought it was a bad deal the stock would be down a lot more. Crown's management has been very consistent over the years in executing on the plans they have laid out for themselves.
