Rural Cellular Corp. announced its subsidiary, RCC Holdings Inc., entered into a definitive agreement to acquire the cellular telephone licenses, operations and related assets of Triton Cellular Partners L.P. for $1.24 billion.
Triton Cellular covers about 2.4 million people in Alabama, northern Mississippi, western Kansas, Oregon and Washington. The company’s 209,000 cellular customers will increase RCC’s customer base from 244,000 to 453,000, RCC said.
Since 1996, RCC also has acquired operations in North Dakota, South Dakota, Minnesota, Wisconsin, New York, Vermont, New Hampshire and Maine.
“This acquisition gives us the opportunity to significantly expand our geographic footprint and effectively doubles the size of our company in terms of POPs and cellular customers,” said Richard P. Ekstrand, RCC’s president and chief executive officer.
Mark Rupp, Triton’s senior vice president of business development, said the company began the auction process back in June.
“Our investors are venture capitalists … we felt like we had an opportunity to realize strong returns for our investors,” Rupp said.
Several other companies also bid for Triton, although Rupp did not disclose their names.
Chris Boraas, RCC’s investor relations manager, said Triton’s employees in its regional offices will remain unaffected by the acquisition, and Triton’s customers also will see no immediate changes. Those employees working out of Triton’s headquarters in Philadelphia, however, will be terminated.
The transaction is expected to be completed in the spring of next year, RCC said.
In conjunction with the acquisition, RCC has arranged for a redeemable convertible preferred stock investment of up to $200 million from a group led by Madison Dearborn Capital Partners III L.P., which also includes Boston Ventures L.P. and Toronto Dominion Capital.
Bridge financing of up to $135 million will be provided by TD Securities Inc. and First Union Securities Inc. RCC said it also will enter into a new $1.2 billion credit facility arranged by TD Securities. Triton was advised by Daniels and Associates L.P. and JP Morgan Securities Inc.
