NEW CANAAN, Conn.-New York investment firm Welsh, Carson, Anderson & Stowe agreed to buy Centennial Cellular Corp., and merge the rural cellular provider with CCW Acquisition Corp., a Delaware corporation formed by WCAS, the companies said.
The transaction, to be accounted for as a recapitalization, is valued at approximately $2 billion, including the assumption of $515 million in debt to be refinanced, said Century Communications Corp., which controls about 74 percent of Centennial’s voting stock.
Century said it will receive about $377.5 million for its interest in Centennial when the deal closes.
Century also agreed to vote in favor of the transaction as long as the merger agreement remains in effect.
Centennial, which has cellular properties on the United States mainland and personal communications services operations in Puerto Rico, said it will continue operating as an independent company under its current name and management.
Pursuant to the merger agreement, outstanding shares of Centennial’s Class A common stock would be converted into the right to receive $43.50 in cash or to retain up to 7.1 percent of the Class A stock outstanding after the merger.
Centennial Class B common stock, of which Century owns 81.2 percent, would be converted into the right to receive $43.50 in cash and a number of shares of Class A common stock, if any, such that the aggregate number of shares of Class A stock held by Centennial’s existing shareholders will equal 7.1 percent of the shares outstanding after the merger.
All outstanding shares of Centennial’s convertible redeemable preferred stock and second series convertible redeemable preferred stock will be converted into the right to receive $43.50 in cash on an as-converted basis. Century owns all the outstanding second series convertible shares.
