Alamosa (NASDAQ:APCS)
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From May 2019 to May 2024
Sprint Nextel Corp. (NYSE:S):
-- Approximately 1.48 Million PCS Wireless Users to Become Direct
Subscribers of Sprint Nextel
-- Extends Company's Direct Service Territory to an Additional 20
Million People in 19 States
Sprint Nextel Corp. (NYSE:S) and Alamosa Holdings, Inc.
(NASDAQ:APCS) today announced an agreement for Sprint Nextel to
acquire Alamosa Holdings for approximately $4.3 billion, including the
assumption of approximately $900 million of net debt. This transaction
value represents 9.8x projected 2006 Adjusted Operating Income Before
Depreciation and Amortization ("Adjusted OIBDA" *).
Under the terms of the agreement, Sprint Nextel will acquire all
of Alamosa's outstanding common shares for $18.75 per share (including
Series B Preferred stock on an "as converted" basis) in an all-cash
merger. The acquisition is subject to the approval of Alamosa
shareholders and customary regulatory approvals, and is expected to be
completed in the first quarter of 2006.
"This acquisition closes a long partnership with the management
and shareholders of Alamosa," said Gary Forsee, president and CEO,
Sprint Nextel. "As the largest PCS affiliate, we appreciate their
efforts over the years to grow Sprint's business and we look forward
to continuing a strong relationship with their customers. This
transaction will significantly expand our direct customer base and
territory, and will provide additional value for our shareholders."
David Sharbutt, chairman and chief executive officer of Alamosa
Holdings, Inc., said: "We are pleased to accept Sprint's offer to
acquire our company. We have enjoyed a successful business
relationship with Sprint that has benefited both companies. We not
only helped Sprint build the nation's best nationwide wireless
network, but also successfully brought the Sprint suite of products
and services to our territories over the past 6 years. Our
shareholders and employees can be proud of our results and the value
that we have created in Alamosa."
Alamosa Holdings, based in Lubbock, Texas, provides Sprint PCS
services in 19 states, serving approximately 1.48 million direct
wireless subscribers in 242 customer service areas (CSA's). It is the
largest Sprint PCS wireless Affiliate (based on number of subscribers)
and has reported superior operating metrics, including the highest
penetration and lowest churn rates of the Sprint PCS Affiliates.
Alamosa employs about 1,300 people and had pro forma (for the
acquisition of AirGate completed in the 1st Quarter of 2005) revenues
for the twelve months ended September 30, 2005 of $1,318 million. With
this acquisition, Sprint has announced agreements to acquire more than
2.3 million Sprint PCS affiliate customers.
On Aug. 8, 2005, Alamosa filed a complaint against Sprint
regarding certain exclusivity covenants Sprint had with Alamosa's
subsidiary AirGate. As part of the agreement, Sprint Nextel and
AirGate will seek an immediate stay of litigation pending in the
Delaware Court of Chancery with a final resolution to become effective
upon closing of the acquisition.
About Alamosa
Alamosa Holdings, Inc. is the largest (based on number of
subscribers) Sprint PCS Affiliate of Sprint Nextel (NYSE:S), which
operates the largest all-digital, all-CDMA Third-Generation (3G)
wireless network in the United States. Alamosa has the exclusive right
to provide digital wireless mobile communications network services
under the Sprint Nextel brand name throughout its designated territory
located in Texas, New Mexico, Oklahoma, Arizona, Colorado, Utah,
Wisconsin, Minnesota, Missouri, Washington, Oregon, Arkansas, Kansas,
Illinois, California, and subsequent to year end in Georgia, South
Carolina, North Carolina and Tennessee which includes licensed
population of 23.2 million residents.
About Sprint Nextel
Sprint Nextel offers a comprehensive range of wireless and
wireline communications services to consumer, business and government
customers. Sprint Nextel is widely recognized for developing,
engineering and deploying innovative technologies, including two
robust wireless networks offering industry leading mobile data
services; instant national and international walkie-talkie
capabilities; and an award-winning and global Tier 1 Internet
backbone. For more information, visit www.sprint.com.
Advisors
Sprint Nextel's financial advisor for the transaction was
Citigroup Global Markets Inc. Its principal legal advisor was King &
Spalding LLP. Alamosa Holdings' financial advisors were The Blackstone
Group LP and UBS Investment Bank and its principal legal advisor was
Skadden, Arps, Slate, Meagher & Flom LLP.
*Financial Measures
Certain financial measures included in this release have been
generated using adjustments to amounts determined under generally
accepted accounting principles (non-GAAP). The non-GAAP financial
measures reflect industry conventions, or standard measures of
liquidity, profitability or performance commonly used by the
investment community for comparability purposes. The financial
measures used in this release include the following:
Adjusted OIBDA is defined as operating income plus depreciation,
amortization and special items. We believe that Adjusted OIBDA
provides useful information to investors because it is an indicator of
the strength and performance of ongoing business operations. While
depreciation and amortization are considered operating costs under
generally accepted accounting principles, these expenses primarily
represent non-cash current period allocation of costs associated with
long-lived assets acquired or constructed in prior periods.
-0-
*T
Alamosa Holdings, Inc.
Adjusted OIBDA Reconciliation
Estimated
Twelve Month
Period Ending
(Dollars in millions) December 31, 2006
---------------------------------------- ---------------------------
Operating Income $216
Plus: Depreciation & Amortization 225
Adjusted OIBDA (A) $441
---------------------------------------- ---------------------------
Acquisition Transaction Value (B) $4,330
Adjusted OIBDA Multiple (B / A) 9.8x
---------------------------------------- ---------------------------
*T
Net Debt is debt, including current maturities, less cash and
equivalents and current marketable securities.
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995
A number of the matters discussed in this document that are not
historical or current facts deal with potential future circumstances
and developments, in particular, information regarding the acquisition
of Alamosa Holdings, Inc. The discussion of such matters is qualified
by the inherent risks and uncertainties surrounding future
expectations generally, and also may materially differ from actual
future experience involving any one or more of such matters. Such
risks and uncertainties include: the result of the review of the
proposed merger by various regulatory agencies, and any conditions
imposed in connection with consummation of the merger; approval of the
merger by the shareholders of Alamosa Holdings; satisfaction of
various other conditions to the closing of the merger contemplated by
the merger agreement; and the risks that have been described from time
to time in Sprint Nextel's, Nextel Communications Inc.'s and Alamosa
Holdings' respective reports filed with the SEC, including each
company's annual report on Form 10-K for the year ended December 31,
2004 as amended, and their respective quarterly reports on Form 10-Q
filed in 2005. This document speaks only as of its date, and each of
Sprint Nextel, Nextel and Alamosa Holdings disclaims any duty to
update the information herein.
Alamosa shareholders will receive a proxy regarding this proposal
and a special shareholder's election will be held at a future date to
seek shareholder approval. A slide presentation summarizing the
transaction is available at www.alamosapcs.com.
Additional Information and Where to Find It
In connection with the proposed acquisition and required
shareholder approval, Alamosa will file with the Securities and
Exchange Commission a proxy statement. The proxy statement will be
mailed to the shareholders of Alamosa. Alamosa's shareholders are
urged to read the proxy statement and other relevant materials when
they become available because they will contain important information
about the acquisition and Alamosa. Investors and security holders may
obtain free copies of these documents (when they are available) and
other documents filed with the Securities and Exchange Commission at
the SEC's web site at www.sec.gov. In addition, investors and security
holders may obtain free copies of the documents filed with the SEC by
Alamosa by going to Alamosa's Investor Relations page on its corporate
website at www.alamosapcs.com.
Alamosa and its officers and directors may be deemed to be
participants in the solicitation of proxies from Alamosa's
shareholders with respect to the acquisition. Information about
Alamosa's executive officers and directors and their ownership of
Alamosa stock is set forth in the proxy statement for the Alamosa 2005
Annual Meeting of Shareholders, which was filed with the SEC on April
14, 2005. Investors and security holders may obtain more detailed
information regarding the direct and indirect interests of the Alamosa
and its respective executive officers and directors in the acquisition
by reading the preliminary and definitive proxy statements regarding
the merger, which will be filed with the SEC.
In addition, Sprint Nextel and its officers and directors may be
deemed to have participated in the solicitation of proxies from
Alamosa's shareholders in favor of the approval of the acquisition.
Information concerning Sprint Nextel's directors and executive
officers is set forth in Sprint Nextel's joint proxy
statement/prospectus, which was filed with the SEC on June 10, 2005,
and other reports filed with the SEC. These documents are available
free of charge at the SEC's web site at www.sec.gov or by going to
Sprint Nextel's Investor Relations page on its corporate website at
http://www.sprint.com.