Sprint Nextel's acquisition of iPCS to end row over iDEN
20 October 2009
The third largest US wireless operator Sprint Nextel Corp. has agreed to acquire its last major independent affiliate iPCS Inc. for approximately $831 million, including the assumption of $405 million of net debt, ending a legal battle between the companies.
The price represents $24 a share, a 34 per cent premium to IPCS's Friday closing price.
Schaumburg, Illinois-based iPCS, through its operating subsidiaries, holds the exclusive right to sell wireless mobility communications network products and services under the Sprint brand in 81 markets in the US.
The deal is expected to close late this year or early next year. Sprint expects to achieve approximately $30 million of synergies annually in the transaction and expects the transaction to be free cash flow accretive to Sprint in 2010.
Sprint has been acquiring its affiliates over the past several years after its 2005 buy of Nextel caused operational issues for the combined company, including outcry from affiliates that saw their competitive position compromised.
Under the terms of the agreement, Sprint will no longer be required to divest its iDEN network in certain iPCS territories and will terminate its previously announced divestiture process pending closing of the transaction.