The following case studies illustrate the business challenges and successes achieved by Beechtree Capital.
Portfolio Company: American Tower Corporation (AMT)
The largest U.S. owner and operator of radio communications leased tower facilities.
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New Industry (1988): Communication Towers |
Challenge:
Beechtree Capital founders initially created this new company in its new industry and, with associated investors, participated in and led the acquisition of the predecessor of AMT for $8.2 million in 1987. $500 thousand of this amount was equity, and the balance was senior and subordinated debt. At that time, the company, a Texas-based owner and operator of approximately 32 radio towers, was a relatively unknown, undeveloped business. The challenge was to establish and finance a company in an unknown and untested industry, to create and market the corporate brand and services, to create institutional financial interest in communication towers as an industry, to grow internally and through numerous acquisitions, to end operating losses, generate sustainable annual operating income and positive cash flow.
Beechtree Role:
George Weiss and Romeo Laurel served, respectively, as Chairman of the Board and COO/CFO of the company through 1994. During these seven years, Messrs. Weiss and Laurel led numerous equity and structured debt financings and acquisitions and all of the capital activities required to grow the company into a mature, profitable business.
In 1992, these Beechtree principals refinanced the company with long term debt to buy out certain existing shareholders, resulting in Messrs. Weiss and Laurel being two of four remaining shareholders. The company was further refinanced in 1994 when 85% of the company’s equity was sold to Chase Capital and other institutional investors for $32 million. In 1994 and 1995, Chase Capital, Clear Channel Communications, and other investors, including Beechtree principals, invested over $50 million at a company valuation exceeding $125 million.
Results:
Beechtree Capital founders and associated investors helped usher in the era of wireless communication by developing the radio tower industry. The U.S. cable, paging, cellular and other industries could not have grown to their present heights without the vision and pioneering efforts of these two Beechtree principals. In June 1998, Messrs. Weiss’ and Laurel’s predecessor company merged with American Radio Systems, forming AMT, a New York Stock Exchange corporation. The company’s value at the time of merger was approximately $1 billion. Today, AMT is the premier U.S. owner and operator of wireless and broadcast communications sites with over 32,000 owned or managed sites throughout the world. Messrs. Weiss and Laurel remain stockholders of the corporation whose present market value exceeds $17 billion.
