ALEXANDRIA, Minn.-Rural Cellular Corp. announced a definitive agreement to acquire the operations and related assets of Atlantic Cellular’s Vermont, New Hampshire, New York and Massachusetts cellular telephone licenses.
The cellular properties include all of Vermont, western New Hampshire, the northeast corner of New York and northwestern Massachusetts.
Rural Cellular said it will pay $256 million cash for the acquisition. Toronto Dominion Bank, which acted as financial adviser to Rural Cellular, provided long-term financing to support the acquisition.
Rural Cellular will gain a contiguous, multistate service area of 21,000 square miles that encompasses about 1.1 million pops. The company said its markets will cover 2.85 million pops and 179,000 customers when the agreement is completed.
The transaction is subject to regulatory approval and is expected to be completed this summer, said Rural Cellular.
Rural Cellular last May acquired Unicel, a cellular operator in Maine. Interest on the debt financing incurred from the acquisition resulted in a net loss during the fourth quarter for Rural Cellular.
Net loss for the quarter totaled $1.65 million, or 19 cents per share, compared with net income of $533,000, or 6 cents per share, for the corresponding period a year ago. Net loss for the year was $1.27 million, or 14 cents per share, compared with net income of $3.5 million, or 41 cents per share, during 1996.
RCC reported revenues of $15.5 million for the quarter ended Dec. 31, compared with revenues of $8.3 million for the same quarter a year earlier. Revenues for the year totaled $53.9 million, compared with revenues of $30.5 million for 1996.
“The past year was a period of tremendous growth and expansion for RCC,” said Richard P. Ekstrand, president and chief executive officer. “Managed pops increased 59 percent to 1.75 million at year-end 1997, reflecting the acquisition of our Maine operation and the expansion of Wireless Alliance into the Sioux Falls, S.D., market.”
Wireless Alliance, a personal communications service joint venture, is owned 51 percent by Rural Cellular and 49 percent by Aerial Communications Inc.
