Metrocall Inc. has commenced a public offering of four million shares of its common stock at a price of $28.25 per share.
The company expects to receive net proceeds from the offering of about $107 million and is concurrently offering $110 million principal amount of senior subordinated notes due 2007. The closings of the stock offering and the notes offering are not conditioned upon each other, the company said.
Metrocall said it will use about $113 million of the net proceeds from the concurrent offerings to repay debts. The balance of the net proceeds-about $100 million-will be used to fund general working capital requirements, to finance future acquisitions and for general corporate purposes.
The company claimed 839,358 pagers in service at mid-year, making it the sixth largest paging carrier in the United States.
Last year, the company said it tripled its pagers in service by acquiring FirstPAGE USA Inc. and MetroPaging Inc., and by achieving internal growth of more than 35 percent.
Metrocall concentrates its service in four operating regions-the Northeast, the Mid-Atlantic, the Southeast and the West-covering about 840 cities. In 1993, the company launched a nationwide network at 929.5125 MHz consisting of its own transmitters as well as intercarrier agreements that provide signal coverage on a common frequency in its markets.
While acquisition remains an important part of its growth strategy, Metrocall said it also is expanding its sales effort into areas where it has acquired network infrastructure and signal coverage including Boston, Miami and Orlando, Fla., in the East and San Diego, Las Vegas and Phoenix in the West. The company intends to enter the Carolinas and Georgia as well as Tucson, Ariz., and Salt Lake City next year.
Metrocall claims its nationwide network provides a platform from which to enter new markets cost effectively by using the existing infrastructure to carry a local frequency during the start-up period. In this way, the company said it can place a local or regional frequency on a pre-existing nationwide transmitter and thus begin service in a new market at a low incremental cost. Customers in new markets opened in this way can be economically served by Metrocall’s National Customer Service Center until such time as a local sales office is established, the company said.
The shares are being offered by a U.S. underwriting syndicate managed by Lehman Brothers Inc., Morgan Stanley & Co. Inc. and Wheat, First Securities Inc. as well as an international underwriting syndicate.
