Uniti Group Inc's plans to raise roughly $450 million in equity and $250 million in debt to finance a pair of acquisitions will not keep the company from pursuing future deals, company executives said.
The company, formerly known as Communications Sales & Leasing Inc., has committed funding in place for the $625 million cash component of its $700 million acquisition of Southern Light LLC, and will pursue permanent financing at an unspecified later date, executives said in a conference call.
The $700 million the two offerings are expected to raise will also pay for the cash portion of the company's acquisition of Hunt Telecommunications LLC, the executives said. They declined to provide details on the timing of the two offerings, or on the company's pro forma AFFO estimates for once its new capital structure is in place.
Both acquisitions are expected to close in the third quarter.
Asked whether the prospect of two capital raises will forestall other acquisitions, President and CEO Kenny Gunderman replied, "It's not going to slow us down," citing the company's ability to pay for transactions with its revolving credit line and refinance them on the public markets later.
Gunderman brushed off an analyst's suggestion that the company had departed from its usual acquisitions philosophy by competing with other bidders to buy Southern Light.
While Uniti usually prefers to pursue "proprietary opportunities," Gunderman said, "occasionally you do have to step out of that norm and compete." Given the "obvious strategic fit" with Southern Light, he said, "we felt that we wanted to win."