Sprint will get nTelo's customers and retail outlets when the deal closes.

August 11, 2015

2 Min Read

NTELOS Holdings Corp. ("NTELOS"; NASDAQ: NTLS) announced today that it has entered into a definitive agreement to be acquired by Shenandoah Telecommunications Company ("Shentel"; NASDAQ: SHEN) in an all-cash transaction valued at approximately $640 million, including net debt.

NTELOS stockholders will receive approximately $208 million in cash, or $9.25 per share, representing an approximately 60% premium over the 30 day volume weighted average price of NTELOS's stock as of August 7, 2015. Shentel will assume NTELOS's net debt, which, when adjusted for expected Eastern Markets wind down obligations, stood at approximately $431 million as of June 30, 2015. Shentel will finance the acquisition with a new, expanded credit facility.

Concurrent with the signing of the merger agreement, Shentel entered into a series of agreements with Sprint Corporation ("Sprint"; NYSE: S), including the expansion of Shentel's "affiliate" relationship with Sprint. This will result in the "nTelos" brand being discontinued after closing and NTELOS's approximately 297,500 wireless retail customers becoming Sprint-branded customers.

Additionally, NTELOS's retail stores will convert into Sprint-branded stores that will be managed by Shentel. NTELOS's Strategic Network Alliance ("SNA") with Sprint, which calls for NTELOS to provide wholesale roaming services for Sprint customers, will terminate.

"After reviewing our strategic options, NTELOS's Board of Directors has determined this course of action to be in the best interests of our shareholders. This all-cash transaction greatly benefits NTELOS shareholders by providing a liquidity event at an attractive premium," said Rod Dir, Chief Executive Officer of NTELOS. "We view the acquisition as a combination between two great companies, both of which have strong roots in our local communities. We believe our customers will see a seamless transition to the Sprint platform used by Shentel and will greatly benefit from Shentel's strong track record of providing reliable wireless service through its expanded and extended affiliate relationship with Sprint. Likewise, the Sprint-branded customer base will continue to benefit from NTELOS's high quality wireless network and robust retail presence. We are very appreciative of the loyalty of our customers and proud of the dedication of our employees to the NTELOS brand."

The acquisition of NTELOS by Shentel, which has been unanimously approved by the Boards of Directors of both companies, is expected to close in early 2016, subject to customary conditions, including necessary approvals from federal and state regulators and NTELOS stockholders as well as the completion of Shentel's re-affiliation transaction with Sprint. Quadrangle Capital Partners, which owns over 18% of NTELOS's outstanding common stock, has entered into an agreement to vote its shares in favor of the merger.

The previously announced wind down of commercial operations in NTELOS's Eastern Markets will continue as planned and is expected to be completed by November 15, 2015.

UBS Investment Bank and Stephens Inc. are acting as financial advisors and Mayer Brown LLP is acting as legal advisor to NTELOS for the transaction.

Ntelos Inc. (Nasdaq: NTLO)

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