India's "The Economic Times" reports that Fore Group portfolio company TowerVision Ltd. is again up for sale. The newspaper says that the principle shareholders of TowerVision are negotiating with several potential buyers, among them its competitor and market leader, American Tower Corporation (NYSE: AMT), and a few large private equity buyout funds, to sell a controlling stake in the company at a value of $500-550 million.
TowerVision develops, operates, and manages telecommunications towers, and is one of the most successful Israeli companies in this field. It buys or builds cellular towers, which it leases in long-term contracts to Indian cellular operators. By owning the towers, the company can lease them to multiple tenants, thereby saving costs and shortening the time needed to expand cellular networks.
Fore Group owns 34% of TowerVision, Jarvinia Holdings Ltd. (in which Mivtach Shamir Holdings Ltd. (TASE:MISH), controlled by Meir Shamir is a partner) owns 11%, RP Capital (owned by Rafi Brenner) owns 8%, and Quadrangle Capital Partners, a US private equity fund with $3 billion in assets under management, owns 31%.
The Fore Group is owned by two sets of brothers - Moshe and Eliyahu Shushan, and Gad and Dov Sluk. Moshe Shushan is the chairman. Mivtach Shamir owns 35% of Jarvinia, Schimmel family of the UK owns 30%, and yuval Harel and Ofer Shani each own 17.5%.
"The Economic Times " writes "Negotiations have moved ahead the most with American Tower, as it has revived its interest to acquire the company. TowerVision's shareholders are ideally looking to conclude the transaction by this calendar year, said multiple sources familiar with the ongoing developments."
It quotes an official as saying, "The company needs growth capital to fuel its next round of planned expansion and its financial investors are not looking to stay invested long term."
The newspaper says, "The muted growth in 3G services coupled with decline in profitability of telecom service providers are making it more difficult for standalone players like TowerVision to grow operations. Gurgaon-headquartered TowerVision is a seven year old firm that has 8,300 towers in its portfolio nationwide with 13,000 tenants but it has fallen short of its target of scaling up to 12,000 structures by 2012."
TowerVision has raised $320 million in equity and debt since it was founded, and The Economic Times " estimates that it has $230 million in debt.
The valuation of telecommunications services ompanies is derived from the number of sites they own. American Tower owns 11,000 sites in India, making it the second largest firm in the country, after Bharti Infrantel Ltd., which has 81,000 sites and a 40% market share.
The Fore Group has declined to comment.
Published by Globes [online], Israel business news - www.globes-online.com - on April 22, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013