By Lisa Kerner
Charlotte, N.C., Oct. 19 - iPCS, Inc. agreed to be acquired by Sprint Nextel Corp. for $24 per share in a deal valued at approximately $831 million, including the assumption of $405 million of net debt, it was announced on Monday.
The per-share offer price is a 34% premium to iPCS' closing stock price on Friday.
iPCS shareholders with approximately 9.5% of the company's outstanding common shares have already agreed to tender their shares in Sprint's offer, according to a joint news release from the companies.
Sprint and iPCS said they will seek an immediate stay of all pending litigation between the companies as part of their merger agreement.
As a result, Sprint will no longer be required to divest its iDEN network in certain iPCS territories. Sprint said it will terminate its previously announced divestiture process pending closing of the merger.
The acquisition is expected to be completed in the fourth quarter of 2009 or early 2010, according to the release.
Sprint expects the transaction to be free cash flow accretive in 2010. The company also expects to achieve approximately $30 million of synergies annually.
The merger agreement includes termination rights for both companies as well as payment of a $12.5 million termination fee by iPCS under specified circumstances, according to a form 8-K filed with the Securities and Exchange Commission.
"Acquiring iPCS brings added value to Sprint by expanding our direct customer base, growing our direct coverage area and simplifying our business operations," Sprint chief executive officer Dan Hesse said in the release.
Citigroup Global Markets Inc. and King & Spalding LLP advised Sprint Nextel. iPCS was advised by UBS Investment Bank, Morgan Stanley & Co. Inc. and Mayer Brown LLP.
Based in Schaumburg, Ill., iPCS owns and operates Sprint Nextel's nationwide PCS network.
Sprint Nextel is an Overland Park, Kan.-based provider of wireless and wireline communications services.
| Acquirer: | Sprint Nextel Corp.
|
| Target: | iPCS, Inc.
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| Announcement date: | Oct. 19
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| Transaction total: | $831 million
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| Price per share: | $24.00
|
| Termination fee: | $12.5 million
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| Expected closing: | Fourth quarter of 2009 or early 2010
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| Stock price for target: | Nasdaq: IPCS: $17.88 on Oct. 16
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