Sprint Nextel said Monday it will acquire Alamosa Holdings, its largest Sprint-branded wireless affiliate, for $3.4 billion. Alamosa shareholders will receive...
KANSAS CITY, Mo. — Sprint Nextel said Monday it will acquire Alamosa Holdings, its largest Sprint-branded wireless affiliate, for $3.4 billion.
Alamosa shareholders will receive $18.75 per share, a 15 percent premium from the stock’s Friday close of $16.26. The deal also includes the assumption of $900 million in debt.
Alamosa, based in Lubbock, Texas, sells Sprint-branded services in 19 states and has 1.48 million subscribers. It reported $1.2 billion in revenue last year.
Sprint Nextel is based in Reston, Va., but has an operational headquarters in Overland Park, Kan.
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The acquisition is subject to approval by Alamosa shareholders and regulatory officials. Sprint Nextel said it expected to close the deal in the first quarter of next year.
Alamosa is the fourth affiliate Sprint Nextel has acquired since Sprint bought Nextel Communications in August for $35 billion to form the nation’s third-largest wireless company.
So far, the company has acquired three Sprint-branded affiliates: U.S. Unwired for $1.3 billion; Baton Rouge, La.-based Gulf Coast Wireless for $287.5 million; and IWO Holdings of Albany, N.Y., for $427 million.
Several of the Sprint affiliates, including Alamosa, filed suit against that company as it prepared for the Nextel acquisition over the summer, saying Sprint’s sale of Nextel-branded products would violate the company’s agreement not to compete with the affiliates in their territories. As part of Monday’s deal, Alamosa agreed to set aside its lawsuit.
In conference calls with analysts and in interviews, Sprint Nextel Chief Executive Officer Gary Forsee had said the company was trying to negotiate new deals with its affiliates.
But Alamosa officials said during an earnings call two weeks ago that a new deal was unlikely.
Sprint Nextel is also scheduled to purchase Nextel Partners, its largest affiliate, next year. The two companies are locked in a battle over that affiliate’s value, and a Delaware Chancery Court judge recently ruled that ongoing appraisals must be made public.
Greg Gorbatenko, a telecommunications analyst with Jackson Securities, said the price of the Alamosa deal was in line with other recent telecom acquisitions and should not affect the Nextel Partners appraisals.
Gorbatenko also said he expects Sprint Nextel to eventually buy the remaining six Sprint affiliates.