Sprint Keeps iDEN Assets
The deal will release Sprint from having to divest its iDEN assets in certain Midwestern markets where iPCS operates and add about 700,000 direct iDEN customers to Sprint. (See Sprint Is iDone With Some iDen Assets and Sprint to Divest Some iDEN Assets.)
Sprint and iPCS have been battling in courts since Sprint acquired Nextel in 2005 and iPCS claimed the merger violated an exclusive affiliate agreement it had with Sprint. Earlier this year, an Illinois court ordered Sprint to sell off network assets in iPCS's territories. But with this acquisition, Sprint gets to keep the customers and network coverage.
The total value of the deal is $831 million, which includes $405 million of net debt. Sprint will pay $24 per iPCS share, which marks a 34 percent premium to the price of iPCS shares as Friday, October 16.
Sprint said the transaction will be free cashflow accretive in 2010 and that the deal is expected to close late in the fourth quarter this year or in early 2010.
— Michelle Donegan, European Editor, Unstrung