Mobilitie, the country’s largest privately held telecommunications infrastructure company, has struck a deal to be sold to Australia’s BAI Communications, the Business Journal has learned.
The Newport Beach company, whose infrastructure offerings enable wireless coverage in a variety of settings, ranging from stadiums to casinos, is selling for just under $1.7 billion, investment banking sources familiar with the deal tell the Business Journal.
BAI, which is backed by the Canada Pension Plan Investment Board, outbid several private equity shops and other well-funded investment firms, including Blackstone and KKR, for Mobilitie, those sources said.
A deal was finalized late last week, at a price significantly higher than the $1.3 billion valuation initially estimated for the company by Bloomberg earlier this month, when a deal was still being negotiated.
Mobilitie founder and Chairman Gary Jabara last week confirmed that a deal had been reached, but declined to discuss the financial aspects of the transaction, citing confidentiality reasons.
The company will be run out of Newport Beach as a division of BAI, which has been looking to increase its presence in the U.S. It also owns New York’s Transit Wireless.
BAI designs, builds and operates a variety of communications infrastructure, including cellular, Wi-Fi, broadcast, radio and IP networks. In addition to Transit Wireless, its operations span Australia, Canada, the U.K. and Hong Kong.
While Jabara will leave the company following the sale, the remainder of Mobilitie’s existing executive team is expected to remain in place. The tech firm counts some 200 people in its local operations.
The deal is expected to close in a few months.
Wireless Exit
The sale includes all the wireless assets of Jabara, a former partner in Deloitte & Touche who headed the firm’s wireless real estate and infrastructure group, and who founded Mobilitie in 2004.
Company assets include outdoor and indoor Distributed Antenna Systems, which are used in venues like horse racing complex Churchill Downs in Kentucky, concert venues, universities, and other areas where large groups of wireless users are concentrated. It’s the biggest installer and operator of DAS systems in the country.
Mobilitie also counts a large portfolio of wireless communication towers, as well as a growing collection of small cell systems across the country that are expected to be increasingly used for 5G wireless connectivity, among its other assets and product lines.
This month, the company made headlines for another business sector when it broke ground on a new fiber network across the Bay Area. Mobilitie said it is building nearly 200 route miles of fiber, which should boost high-speed and reliable wireless connectivity across much of the Silicon Valley.
The company operates hundreds of wireless networks across the country, at some of the largest and highest traffic locations in the world, officials said at the time of the Bay Area groundbreaking.
Timing Right
“It’s bittersweet,” Jabara said of the sale. “A lot of these people have been with me for over 20 years.”
“The biggest downside, for me, will be missing the interaction with the staff,” said Jabara, who said he will not remain involved in any capacity in Mobilitie after the sale’s done.
He said the turmoil of the past year, while validating Mobilitie’s abilities to provide better wireless service across a variety of operators and networks, gave him “a chance to pause” and figure out his plans going forward.
In terms of maximizing Mobilitie’s value and moving on to other ventures, the BAI deal is “good timing,” he said.
Next Plans
Jabara, a relentless entrepreneur who has a variety of local business interests outside Mobilitie, made it clear he’s not retiring.
He said he’ll now be putting his efforts toward expanding another tech-focused firm he created, Newport Beach’s ioXt Alliance.
The alliance, founded three years ago, is backed by several large tech companies. It is intended to handle the rapidly increasing demand for Internet of Things device certification that meets security requirements across a variety of product categories.
Jabara also said he’ll be putting a large portion of the proceeds from the sale into his already sizeable real estate portfolio.
He’s one of the area’s largest private real estate owners, with notable holdings along the coast from Laguna Beach to Huntington Beach. New investments are likely to be focused outside the area, he said.
