Sprint Nextel to Buy IPCS - Ends Legal Action

­US network, Sprint Nextel has announced that it is offering to buy its regional affiliate, iPCS for US$831 million, including the assumption of US$405 million of net debt.

As part of the agreement, Sprint Nextel and iPCS will seek an immediate stay of all pending litigation between the parties with a final resolution to become effective upon closing of the acquisition. As a result, Sprint will no longer be required to sell its iDEN network in certain iPCS territories and will terminate its previously announced divestiture process pending closing of the transaction.

Sprint expects to achieve approximately $30 million of synergies annually in the transaction and expects the transaction to be free cash flow accretive to Sprint in 2010.

Shareholders with approximately 9.5 percent of the outstanding common shares of iPCS have already agreed to tender their shares pursuant to the tender offer and to vote their shares in favor of the merger.

iPCS's services are sold under the Sprint brand name and in Sprint-branded stores. Because of the nearly seamless marketing and sales relationship between Sprint and iPCS, customers should not experience any change in their service as a result of this transaction.

"Acquiring iPCS brings added value to Sprint by expanding our direct customer base, growing our direct coverage area and simplifying our business operations," said Dan Hesse, CEO of Sprint Nextel. "Customers in iPCS territory will see a seamless transition and continue to enjoy a superb customer experience."

"We are very pleased to have reached this agreement with Sprint Nextel. Given the increasingly competitive landscape, we believe this is an opportune time to provide our shareholders with a liquidity event at a very attractive price. iPCS shareholders will receive a significant and immediate premium for their shares and our customers will continue to receive the same excellent service from the same dedicated people who provide that service today," said Timothy M. Yager, president and CEO of iPCS. "We look forward to working with the Sprint Nextel team to ensure a smooth completion of the transaction and transition in the coming months."

Posted to the site on 19th October 2009