Sprint Nextel folded another affiliate into its operation, acquiring
Conshohocken, Pa.-based Ubiquitel for $1.3 billion in cash.
The deal allows
it to solidify its coverage of several mid-size markets while effectively
ending a lawsuit that its prey had brought against it.
By paying just under a 2 percent premium on the last quoted price of $10.19, Sprint Nextel made the acquisition on the cheap in comparison to the 15 percent premium it paid for Enterprise Communications in December.
As part of the purchase agreement, Sprint Nextel and Ubiquitel will seek an
immediate stay of litigation that is pending in the Delaware Court of
Chancery, with a final resolution to become effective once the acquisition
closes.
Sprint Nextel said it expects the acquisition to become final during the
second quarter of 2006, once regulatory hurdles have been cleared and
shareholders have given their blessing.
Under terms of the agreement, Sprint Nextel will acquire all of Ubiquitel’s
outstanding shares for $10.35 per share.
Ubiquitel earned $422.7 million in revenues last year, serving mid-size
markets in California, Idaho, Indiana, Kentucky, Nevada, Tennessee, Utah,
Washington and Wyoming, covering 8.3 million people.
As of March 31, the company served approximately 452,000 direct wireless subscribers and another 151,000 wholesale subscribers.
This
acquisition puts to rest a lawsuit filed by Ubiquitel. Sprint Nextel had
acquired Alamosa Holding in November, also as a means of settling a
lawsuit.
