Dobson Communications Corp. plans today to begin a road show in advance of its initial public offering, which is expected to be priced during the first week of February.
Dobson, a cellular service provider based in Oklahoma City, filed its registration statement for the offering with the Securities and Exchange Commission Nov. 12. The company is hoping to raise more than $500 million through the offering of 25 million shares of class A common stock.
Dobson in December said it expects the stock to be priced at between $20 and $22 per share.
Concurrently, the company plans to sell up to 1.47 million class A shares to AT&T Wireless Services Inc.
Dobson and AT&T Wireless last year formed a joint venture to acquire American Cellular Corp. for $2.4 billion. American Cellular’s systems cover 4.8 million pops and serve 398,000 subscribers as of the end of the third quarter. That transaction is expected to close during the first quarter.
Dobson said it plans to use $372.5 million from the offering as a capital contribution to its joint venture with AT&T Wireless. It also plans to use up to $74.2 million to redeem all outstanding shares of class D preferred stock and class E preferred stock. Any remaining funds will be used for working capital and other general corporate purposes.
If the company fails to raise sufficient funds from the offering to accomplish its objectives, the company said it will use funds from an available credit facility or other sources to complete the acquisition of American Cellular and to redeem the class D and E shares.
Dobson had about 9.5 million pops and about 424,000 customers at the end of the third quarter. It serves markets including Arizona, California, Kansas, Maryland, Missouri, New York, Ohio, Oklahoma, Pennsylvania, Texas and West Virginia.