CPP Investments and AIMCo Help BAI Communications Grow

The Canadian Press reports that CPP Investments and AIMCo will invest an additional $2.4 billion in BAI Communications:

Canada Pension Plan Investment Board and Alberta Investment Management Corp. are investing an additional $2.4 billion in BAI Communications to help the wireless infrastructure company grow.

CPP Investments is the majority shareholder in BAI, while AIMCo is a minority investor.

BAI announced a deal Monday to buy Mobilitie, the largest privately held telecommunications infrastructure company in the United States.

It says the deal is a major expansion of its business in North America where it provides cellular and Wi-Fi connectivity across large infrastructure projects.

The acquisition is subject to regulatory approvals and is expected to close in the third quarter of this year.

BAI also recently announced a new partnership with Transport for London in Britain.

CPP Investments put out a press release on this deal: 

Canada Pension Plan Investment Board (“CPP Investments”) and Alberta Investment Management Corporation, on behalf of certain of its clients, (“AIMCo”) today announce a significant follow-on commitment to BAI Communications (“BAI”). This C$2.4 billion commitment will support BAI’s global growth strategy, acquisitions and new partnerships. This includes its recently announced acquisition of Mobilitie, in the United States as well as the new partnership with Transport for London (TfL) in the UK, among other initiatives.

The acquisition of Mobilitie, the largest privately held wireless telecommunications infrastructure company in the United States, represents a major expansion of BAI’s business in North America where it provides cellular and Wi-Fi connectivity across large infrastructure projects, including the New York City subway system, under its majority owned business Transit Wireless. The acquisition significantly extends BAI’s operations across one of the world’s fastest growing connected infrastructure markets, and represents an important step in BAI’s growth strategy, supporting its drive to become one of the leading digital infrastructure players in North America, as well as globally.

BAI’s new partnership with TfL will deliver high speed mobile coverage across the London Underground by the end of 2024, alongside a new full-fibre network to provide London’s homes and businesses with faster internet and better connectivity. The technology will support 4G and 5G roll out and will be the most advanced of its kind in the world, helping to support London’s economic growth.

“We continue to see strong potential in BAI Communications’ vision. BAI has grown from a leading domestic player in Australia to a global provider of cutting edge digital infrastructure solutions across the U.S., Canada, Hong Kong and the U.K.,” said Scott Lawrence, Managing Director and Head of Infrastructure, CPP Investments. “The acquisition of Mobilitie and establishment of a long-term partnership with TfL represent attractive opportunities for CPP Investments to increase its financial commitment to BAI and the digital infrastructure sector more broadly and in doing so generate long-term sustainable returns for our contributors and beneficiaries.”

Since 2009 CPP Investments has been a majority shareholder in BAI (86%), with AIMCo as a minority investor.

“The past year has demonstrated the critical importance of digital infrastructure in all aspects of our lives,” said Ben Hawkins, Senior Vice President, Infrastructure & Renewable Resources at AIMCo. “BAI has been an important digital infrastructure holding in our clients’ portfolios that is further strengthened by its acquisition of Mobilitie and the contract awarded by TfL. The combination of these iniatives capitalize on the enhanced wireless connectivity opportunity in the U.S., the U.K. and around the globe. We are pleased to work with CPP Investments in increasing our commitment to BAI in support a range of growth initiatives.”

The Mobilitie transaction is subject to customary regulatory clearances and is expected to close in the third quarter of the calendar year.

About CPP Investments

Canada Pension Plan Investment Board (CPP Investments™) is a professional investment management organization that manages the Fund in the best interest of the more than 20 million contributors and beneficiaries of the Canada Pension Plan. In order to build diversified portfolios of assets, investments are made around the world in public equities, private equities, real estate, infrastructure and fixed income. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At March 31, 2021, the Fund totalled $497.2 billion. For more information, please visit www.cppinvestments.com or follow us on LinkedInFacebook or Twitter.

About Alberta Investment Management Corporation (AIMCo)

AIMCo is one of Canada’s largest and most diversified institutional investment managers with more than $129 billion of assets under management. AIMCo was established on January 1, 2008 with a mandate to provide superior long-term investment results for its clients. AIMCo operates at arms-length from the Government of Alberta and invests globally on behalf of 32 pensions, endowments and government funds in the Province of Alberta. For more information on AIMCo please visit www.aimco.ca  or follow us on LinkedIn.

Today, BAI Communications (BAI), agreed to acquire Mobilitie, the largest privately held telecommunications infrastructure company in the United States:

This acquisition represents a major expansion of BAI's business in North America where it provides cellular and Wi-Fi connectivity across large infrastructure projects, including the New York City subway system, under its majority owned business Transit Wireless. It significantly extends BAI's footprint coast-to-coast across one of the world's fastest growing connected infrastructure markets. The transaction is subject to customary regulatory clearances and is expected to close in the third quarter of this year.

The acquisition of Mobilitie is a significant step in BAI Communications' growth strategy, supporting its move towards becoming one of the leading connected infrastructure 5G players in North America, as well as globally.

The deal brings together a highly complementary offering between the two organisations, enabling BAI to immediately extend and diversify its solution and service offering beyond its current global markets. It marries Mobilitie's assets and operations across 5G outdoor and indoor wireless infrastructure, worldwide credibility in small cell deployment, and its work with transit operators across major US cities with BAI's long-standing proven expertise in delivering communications infrastructure in dense urban and transit environments.

Combining the expertise, scale, and infrastructure portfolios of both businesses positions BAI to support telecommunications operators and municipalities in the US and its other markets internationally to realise the smart city opportunities that 5G services are offering worldwide.

Igor Leprince, Group CEO of BAI Communications, said: "BAI's acquisition of Mobilitie establishes us as a leading telecommunications infrastructure provider in the United States and the most relevant provider of public transit wireless connectivity solutions in North America. This reflects our ambitions for the US as well as the other markets in which we operate globally and puts us in the perfect position to capitalise on the growing prioritisation of connected infrastructure in regions such as the UK and Europe. The scale and strong relationships with large venue operators and mobile network operators that Mobilitie brings fits perfectly with BAI's existing leadership in connected transit and infrastructure.

"Mobilitie, like BAI, places a high priority on offering technical expertise and impeccable delivery to its customers, alongside its deep commitment to exceptional customer service. This alignment and the complementary fit of our offerings make this an exciting move for BAI and our customers around the world. It strongly positions us to scale and extend the work we are already delivering," he added.

Backed by Mobilitie's Founder and Chairman, Gary Jabara, and Shamrock Capital, Mobilitie's portfolio includes existing agreements to provide wireless communications to the public transit systems in Seattle and the San Francisco Bay Area. The acquisition will also add Mobilitie's broader portfolio of 220 venues across 39 states, 10,000 small cells across 45 states, and 300 tower sites across 14 states to BAI's operations. This builds on BAI's existing success providing neutral host infrastructure in the major subways of New York, Toronto, and Hong Kong, and in Australia with one of the most extensive broadcast networks in the world. It will also support BAI's expansion in the UK and Europe as it pursues, and wins, significant opportunities.

Gary Jabara, Founder and Chairman of Mobilitie said: "We're very excited about this transaction, which augments Mobilitie's market impact worldwide. BAI's significance as a 5G player, together with Mobilitie, will enable unprecedented support of US wireless carriers. It puts us on a clear, long-term path to greatly accelerate business and help our customers, especially the mobile network operators." He concluded, "Combining BAI's connectivity solutions and international presence with Mobilitie's North American assets, including our nationwide footprint of tier one venues, public transit systems in the San Francisco Bay Area and Seattle, along with 10,000 small cells and thousands of New York small cells that are in and around BAI's existing assets, makes us better positioned for 5G growth than anyone else in North America."

Take the time to read about BAI Communications here:

In a world where connectivity is essential to our daily lives, BAI Communications designs, builds and operates communications infrastructure – cellular, Wi-Fi, broadcast, radio and IP networks – connecting communities around the world.

With our state-of-the-art robust communications systems, governments and businesses can unlock new revenue streams and fast-track the commuter economy.

Experts in confined space communications infrastructure, in Toronto BAI provides Wi-Fi and cellular connectivity at each station throughout the Toronto Transit Commission (TTC) subway system. Complete cellular connectivity in all TTC stations and throughout the subway tunnels will be completed by 2021. Commuters login to the network TConnect with approximately 170,000 sessions and some 100,000 unique devices every weekday.

BAI has also installed over 75 km of fibre in the TTC subway system.

In New York, we enable more than 5 million* daily subway commuters to shop, share, stream, earn and learn through our cellular and Wi-Fi network.

In Hong Kong, commuters on the MTR collaborate, create and stay connected thanks to our trusted expertise in designing and delivering high-quality networks in confined and complex transport systems.

In Australia, we own and operate one of the most extensive transmission networks in the world, delivering 59 million broadcasting hours to 99% of the population. In times of crisis, national broadcasters rely on us to maintain the connection with Australians – flood, fire, cyclone or other natural disaster – and emergency services rely on us to help keep them informed.

In the UK, with our global network of experts paired with local in-depth knowledge, we are working with industry leaders to explore the role of technology in the transport system of the future.

BAI is in the position to create richer commuter experiences and smarter cities.

About Canada Pension Plan Investment Board

BAI Communications has been majority owned by Canada Pension Plan Investment Board (CPP Investments) since 2009. CPP Investments is a trusted long-term investor with C$475.7 billion under management (as at 31 December, 2020), and actively invests in infrastructure assets around the world.

CPP Investments is a professional investment management organization that invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits on behalf of 20 million contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, CPP Investments invests in public equities, private equities, real estate, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm’s length from governments.

*December 2017. Source: Metropolitan Transit Authority

This is a great deal for CPP Investments, the majority owner of BAI Communications (86%) and AIMCo, the minority owner.

By investing an additional $2.4 billion in BAI Communications to help the wireless infrastructure company grow, they allowed for the acquisition of Mobilitie, the largest privately held telecommunications infrastructure company in the United States:

Connectivity is a vital component of daily life, and Mobilitie works with venues, wireless carriers, and other operators to ensure their customers are better connected.

As a global provider of complete wireless real estate solutions, we design, build, manage, and maintain wireless and wireline infrastructure to deliver optimal coverage in the most demanding and challenging environments. From high-rises and hospitality venues to the largest sports stadiums, entertainment arenas and more, we engineer robust solutions that not only deliver the coverage and capacity needed today but also anticipate the needs of tomorrow.

Our complete wireless infrastructure solutions include funding, designing, building, and maintaining neutral host outdoor and indoor Distributed Antenna Systems, Small Cell systems, Wi-Fi systems and communication towers.  

With this acquisition, BAI is set to grow its share of the North American market:

Australian communications infrastructure provider BAI Communications has struck a deal to acquire Mobilitie, which claims to be the largest privately held telecommunications infrastructure company in the United States. 

Based in California, Mobilitie provides telecommunication services and wireless infrastructure, including communication towers, small cells, internet of things (IoT), fibre and Wi-Fi networks, across major industries such as sports and entertainment, real estate, hospitality, education, healthcare, government and transportation. 

The acquisition represents a major expansion of BAI Communications’ business in North America, where it provides cellular and Wi-Fi connectivity across large infrastructure projects, including the New York City subway system, under its majority-owned business Transit Wireless.  

As such, the deal significantly extends the Sydney-headquartered communications infrastructure provider’s footprint coast-to-coast across what it considers to be one of the world’s fastest growing connected infrastructure markets.  

Indeed, it is hoped the acquisition will support BAI Communications’ strategic goal of becoming one of the leading connected infrastructure 5G players in North America, as well as globally. 

“BAI’s acquisition of Mobilitie establishes us as a leading telecommunications infrastructure provider in the United States and the most relevant provider of public transit wireless connectivity solutions in North America,” said Igor Leprince, group CEO of BAI Communications.  

“This reflects our ambitions for the US as well as the other markets in which we operate globally and puts us in the perfect position to capitalise on the growing prioritisation of connected infrastructure in regions such as the UK and Europe.  

“The scale and strong relationships with large venue operators and mobile network operators that Mobilitie brings fits perfectly with BAI’s existing leadership in connected transit and infrastructure,” he added. 

From Leprince’s perspective, Mobilitie, like BAI, places a high priority on offering technical expertise and “impeccable” delivery to its customers, alongside a deep commitment to exceptional customer service. 

“This alignment and the complementary fit of our offerings make this an exciting move for BAI and our customers around the world. It strongly positions us to scale and extend the work we are already delivering,” he said. 

Broadly, the deal brings together what BAI Communications suggests is a highly complementary offering between the two organisations, enabling the provider to quickly extend and diversify its solution and service offering beyond its current global markets. 

Essentially, the acquisition will see Mobilitie’s assets and operations across 5G outdoor and indoor wireless infrastructure, small cell deployment expertise, and its work with transit operators across major US cities complement BAI’s expertise in delivering communications infrastructure in dense urban and transit environments. 

The acquisition will also add Mobilitie’s broader portfolio of 220 venues across 39 states, 10,000 small cells across 45 states and 300 tower sites across 14 states to BAI’s operations.  

It is anticipated that Mobilitie’s additional portfolio will also help to support BAI’s expansion in the UK and Europe as it pursues significant opportunities. 

Just days ago, BAI Communications revealed it had been awarded a 20-year concession by Transport for London (TfL) to establish an underground city-wide integrated communications network delivering multi-carrier cellular, Wi-Fi and fibre services. 

Meanwhile, Gary Jabara, founder and chairman of Mobilitie, said the deal augments Mobilitie’s market impact worldwide. 

“BAI’s significance as a 5G player, together with Mobilitie, will enable unprecedented support of US wireless carriers," Jabara said. "It puts us on a clear, long-term path to greatly accelerate business and help our customers, especially the mobile network operators.

“Combining BAI’s connectivity solutions and international presence with Mobilitie’s North American assets, including our nationwide footprint of tier one venues, public transit systems in the San Francisco Bay Area and Seattle, along with 10,000 small cells and thousands of New York small cells that are in and around BAI’s existing assets, makes us better positioned for 5G growth than anyone else in North America,” he added. 

Canada Pension Plan Investment Board (CPP Investments), which is BAI Communications' majority shareholder, welcomed the acquisition deal, as did Alberta Investment Management Corporation, a minority shareholder in BAI.  

“As a long-term investor, on behalf of our clients, we are proud to support the management team of BAI in its successful acquisition of Mobilitie,” said Ben Hawkins, senior vice president of infrastructure and renewable resources at Alberta Investment Management Corporation.  

“BAI has a demonstrated track record of successfully integrating companies as part of its growth strategy and realising the full value of the combined entities for all stakeholders,” he added. 

The transaction is subject to regulatory clearances and is expected to close in the third quarter of this year. 

I am giving you a glimpse of why this is a big deal for CPP Investments and AIMCo, this is the future and wireless infrastructure is a growing business which Canada's large pensions are investing heavily in.

In early May, I discussed how American Tower Corporations (ATC) struck a deal with the Caisse de dépôt et placement du Québec (CDPQ) for the sale of a 30% stake in their European business, ATC Europe. 

Why the interest in wireless infrastructure? Because it's pandemic proof, less cyclical than transportation infrastructure (toll roads, airports, ports) where most of Canada's large pensions have invested in the past, and it just makes great long-term sense to invest in these growing companies.

Canada's large pensions provide much needed long-term financing, allowing these companies to realize on their growth projections, and they can reap robust long-term gains as these operators sign long-term deals with cities and municipalities to provide their wireless communications infrastructure.

It's a win/ win for pensions, these wireless operators, and the beneficiaries and other stakeholders.

Having said this, there are structural issues that worry me, like finding for more qualified workers to address the growing needs of the wireless industry, whether it’s network engineers, wireless technicians, tower climbers or retail sales clerks.

Still, these issues will take time to solve and in the meantime, BAI and Mobilitie can continue executing on their business plan.

They will continue to have support of two large and sophisticated Canadian pension fund managers.

Below, in a world where connectivity is essential to our daily lives, BAI creates communications infrastructure that connects people, enriches communities and advances economies.

I also embedded an excellent Deloitte interview (2019) with with Gary Jabara, founder and chairman of the Mobilitie Group, the largest privately held owner of wireless infrastructure and one of the largest wireless service firms in the US. Take the time to watch this discussion. 

Comments