Verizon in $3.3 billion towers deal with Vertical Bridge

The US operator is not selling the towers in question – 6,339 of them, across 50 states and Washington DC – but rather this is a long-term lease deal. Vertical Bridge secures exclusive rights to lease, operate and manage the sites, initially for a 10-year period, but extendable to 50 years in five-year increments.

Verizon gets an upfront cash payment of around $2.8 billion; the overall sum also includes "certain commercial benefits," it said.

Essentially, as we suggested when the telco's plans to sell off more towers were rumoured back in July, Verizon is looking for ways to make money from these assets, without parting with them entirely.

"This agreement, along with Verizon's existing build-to-suit joint venture with Vertical Bridge, will support Verizon's efforts to drive down tower-related costs and provide greater vendor diversity in a concentrated industry," the parties said, in a statement.

Verizon and Vertical Bridge announced that build-to-suit deal almost 18 months ago. The rationale behind it is that Verizon can direct the build-out of towers where it needs them, and then serve as the anchor tenant on those towers. The towers built under the programme are held in a limited liability company formed by Vertical Bridge in which Verizon has a profits interest.

This latest deal seems to be a similar arrangement, considering the companies' comments around "commercial benefits" set to head Verizon's way.

Naturally, it will also serve as the anchor tenant on the towers and it will have access to additional space on the sites should it need it for future use. There are restrictions on that last clause, but we're not privy to the details.

"We are pleased to have been selected by Verizon as the counterparty in the largest US tower transaction in almost a decade," said Vetical Bridge CEO Ron Bizick,

"This transaction represents a significant step for Vertical Bridge. The vision of the company founders 10 years ago was to create a permanent, private, and at-scale US tower company. This transaction marks a significant milestone in the realization of that vision," Bizick said. "Upon the completion of this transaction, these assets, together with our existing portfolio which includes thousands of young, purpose-built towers, enhance Vertical Bridge's position as a fast, friendly, and flexible colocation partner to the wireless industry."

As it stands, Vertical Bridge claims a portfolio of 11,000 owned and master leased towers across the US. That makes it a decent-sized, but not massive, operation; it notes that there are half a million such sites throughout the country. This deal with Verizon will certainly give it a boost. And, as Verizon pointed out, provide some tower vendor diversity for the rest of the industry.

"This transaction not only solidifies our leadership in the tower space but also strategically positions us to capitalize on the growing demand for wireless infrastructure, especially as AI-driven technologies and 5G continue to reshape connectivity needs across industries," said Marc Ganzi, vice chair of Vertical Bridge and CEO of one of its parent companies, Digital Bridge.

Asset manager Digital Bridge has committed capital to fund the transaction, as has its investment partner Canada's CDPQ. The parties expect the deal to close by the end of this year.