nTelos To Be Acquired By ShentelComments Off on nTelos To Be Acquired By Shentel
nTelos announced yesterday that it has entered into a definitive agreement to be acquired by Shenandoah Telecommunications Company (Shentel) in an all-cash transaction valued at approximately $640 million, including net debt. In addition to this deal, Shentel announced they have amended their affiliate agreement and entered into several other agreements concurrent with this acquisition. The related agreements call for Sprint to pay Shentel up to $252 million over approximately 5-6 years through a reduction in Sprint’s retained revenues under the affiliate agreement in consideration for spectrum, customers, and value derived from the amended Shentel affiliate relationship and related commercial terms.
nTelos stockholders will receive approximately $208 million in cash, or $9.25 per share. Upon closing of Shentel’s purchase of nTelos, Sprint will receive nTelos spectrum assets covering 5.4 million people in parts of Virginia, West Virginia, Pennsylvania, Maryland, Ohio, Kentucky and North Carolina. Shentel will terminate the existing network wholesale agreements between Sprint and nTelos, continue to upgrade the nTelos network to 4G LTE and expand coverage in the areas with at least an additional 150 sites over the next three years, using spectrum acquired by Sprint and made available to Shentel as part of the transaction. Shentel will also be able to utilize Sprint’s 2.5 GHz spectrum within its footprint. This will provide an enhanced and more complete network for the new and existing Sprint customers.
“Sprint and Shentel have a long successful relationship and this announcement will only make it stronger,” said Michael C. Schwartz, Sprint senior vice president of Corporate and Business Development. “With this agreement, Sprint will grow its customer base, improve its financial performance, acquire spectrum in important markets and improve and expand 4G LTE coverage to Sprint and nTelos customers.” Sprint expects the transaction to have a positive impact on EBITDA in the first year following the close of the agreement. The transaction is subject to customary regulatory approvals and is expected to close in early 2016.
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