Sprint Nextel buys Alamosa Holding CDMA

[Mod]

Sprint Nextel reached an agreement to acquire its largest CDMA affiliate, Alamosa Holding for $4.3 billion, including the assumption of $900 million in debt. Under terms of the Alamosa deal, Sprint Nextel will purchase Alamosa's common stock at $18.75 per share in an all-cash transaction.

The acquisition of Alamosa will add approximately 1.5 million direct wireless subscribers in 242 service areas in 19 states. Sprint Nextel noted the purchase price represents a 9.8 times projected 2006 adjusted operating income before depreciation and amortization. The agreement closes a contentious issue between Sprint Nextel and Alamosa. Alamosa initiated legal proceedings against Sprint Nextel following Sprint Corp.'s acquisition of Nextel on Aug. 12. Alamosa claimed the acquisition violated terms of its affiliate agreement.

In addition to acquiring AirGate's operations, Alamosa also picked up AirGate's more comprehensive affiliate agreement, which prevented Sprint from offering wireless service using any licensed spectrum in AirGate's service areas. Alamosa's agreement only prevented Sprint from offering service using the 1.9 GHz spectrum band. Analysts noted this was significant as Nextel's iDEN network uses spectrum in the 800 MHz spectrum bands, and the AirGate exclusivity provision prevented Sprint Nextel from marketing Sprint-branded iDEN services in Alamosa's markets.

_________________
Join the forum & win a free iMate Jaq!