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Verizon Wireless To Acquire Alltel; Will Expand Nation's Most Reliable Wireless Network
BASKING RIDGE, N.J., and LITTLE ROCK, Ark., June 5 /2008 -- Verizon Wireless has entered into an agreement with Alltel Corporation and Atlantis Holdings LLC, an affiliate of private investment firm TPG Capital and GS Capital Partners, to acquire Alltel Corporation in a cash merger. Verizon Wireless is a joint venture of Verizon Communications (NYSE: VZ) and Vodafone (NYSE and LSE: VOD).
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Under the terms of the agreement,
Verizon Wireless will acquire the equity of Alltel for approximately
$5.9 billion. Based on Alltel's projected net debt at closing of
$22.2 billion, the aggregate value of the transaction is $28.1
billion.
The parties are targeting completion of
the merger by the end of the year, subject to obtaining regulatory
approvals.
Once this transaction closes, customers
of both companies will have access to an expanded range of products
and services, including a premier lineup of basic and advanced
devices and an expanded IN Network calling community. Alltel
customers also will benefit from advanced services including
over-the- air downloadable music from a three-million-song library,
and a network that is nationwide, for a uniform coast-to-coast
experience. They also will be able to take advantage of
industry-leading consumer policies, including Test Drive and Worry
Free Guarantee®.
"This move will create an enhanced
platform of network coverage, spectrum and customer care to better
serve the growing needs of both Alltel and Verizon Wireless
customers for reliable basic and advanced broadband wireless
services," said Lowell McAdam, Verizon Wireless president and chief
executive officer.
Alltel serves more than 13 million
customers in markets in 34 states. This includes 57 primarily rural
markets that Verizon Wireless does not serve. The transaction puts
the Alltel markets and customers on a path to advanced 4th
generation services as Verizon Wireless deploys LTE technology
throughout its network over the next several years. Alltel's
customers also will reap the benefits of Verizon Wireless' Open
Development initiative, which welcomes third-party devices and
services to use the Verizon Wireless network.
Verizon Communications, the owner of the
majority stake in Verizon Wireless, expects that the transaction
will be immediately accretive, excluding transaction and integration
costs. "This is a perfect fit, with Alltel's high-value post-paid
customer base, its solid financials, our common network technology,
and significant, readily attainable synergies," said Ivan
Seidenberg, Verizon chief executive officer and chairman of the
Verizon board. "Verizon Wireless' acquisition of Alltel clearly
provides opportunities for enhanced value for Verizon shareholders."
Alltel President and Chief Executive
Officer Scott Ford will continue in his current position as head of
Alltel until the merger is completed.
"Both Alltel and Verizon Wireless have
long track records of delivering a high-quality customer experience
in the marketplace," Ford said. "The combination of our two
companies will continue and improve upon that heritage as, together,
we can more quickly deliver an expanded range of innovative products
and services to our customers."
Verizon Wireless expects to realize
synergies with a net present value, after integration costs, of more
than $9 billion driven by reduced capital and operating expense
savings. Synergies are expected to generate incremental cost savings
of $1 billion in the second year after closing.
Alltel and Verizon Wireless both use a
common network technology, which provides advantages of a seamless
transition for Alltel customers, ease in integrating the two
companies' networks, and scale efficiencies in operating the larger
integrated network.
Morgan Stanley acted as financial
advisor to Verizon Wireless on this transaction and is providing
bridge financing. Debevoise & Plimpton LLP acted as legal advisor to
Verizon Wireless.
Citibank, Goldman Sachs and RBS advised
the sellers on the transaction. Wachtell, Lipton, Rosen & Katz acted
as legal advisor to Alltel, and Cleary Gottlieb Steen & Hamilton LLP
and Ropes & Gray LLP acted as legal advisors to the sellers.
About Verizon Wireless
Verizon Wireless operates the nation's most reliable wireless voice and data network, serving 67.2 million customers. Headquartered in Basking Ridge, N.J., with 69,000 employees nationwide, Verizon Wireless is a joint venture of Verizon Communications (NYSE: VZ) and Vodafone (NYSE and LSE: VOD). For more information, go to: www.verizonwireless.com . To preview and request broadcast- quality video footage and high-resolution stills of Verizon Wireless operations, log on to the Verizon Wireless Multimedia Library at www.verizonwireless.com/multimedia .
About Alltel
Alltel delivers voice and advanced data services nationwide to more than 13 million customers. Headquartered in Little Rock, Arkansas. Alltel is a Forbes 500 company with annual revenues of nearly $9 billion.
About TPG Capital
TPG Capital is the global buyout group of TPG, a leading private investment firm founded in 1992 with more than $50 billion of assets under management and offices in San Francisco, London, Hong Kong, New York, Minneapolis, Fort Worth, Menlo Park, Washington, D.C., Melbourne, Moscow, Mumbai, Paris, Luxembourg, Beijing, Shanghai, Singapore and Tokyo. TPG Capital has extensive experience with global public and private investments executed through leveraged buyouts, recapitalizations, spinouts, joint ventures and restructurings. TPG Capital's investments span a variety of industries including media and communications, financial services, travel and entertainment, technology, industrials, retail, consumer and healthcare. Please visit www.tpg.com .
About GS Capital Partners
Since 1986, Goldman Sachs has raised fourteen private equity and mezzanine investment funds aggregating $69 billion of capital and leverage commitments. GS Capital Partners is the private equity vehicle through which The Goldman Sachs Group, Inc. conducts its privately negotiated corporate equity investment activities. GS Capital Partners is currently investing its GS Capital Partners VI fund. GS Capital Partners is a global private equity group with a focus on large, sophisticated business opportunities in which value can be created through leveraging the resources of Goldman Sachs.
NOTE: This news release contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The following important factors could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements: materially adverse changes in economic and industry conditions and labor matters, including workforce levels and labor negotiations, and any resulting financial and/or operational impact, in the markets served by us or by companies in which we have substantial investments; material changes in available technology, including disruption of our suppliers' provisioning of critical products or services; the impact of natural or man-made disasters or litigation and any resulting financial impact not covered by insurance; technology substitution; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations; the final results of federal and state regulatory proceedings concerning our provision of retail and wholesale services and judicial review of those results; the effects of competition in our markets; the timing, scope and financial impacts of our deployment of fiber-to-the-premises broadband technology; the ability of Verizon Wireless to continue to obtain sufficient spectrum resources; changes in our accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings; and the ability to complete acquisitions and dispositions.
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Source: Verizon Wireless
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