LUBBOCK, Texas-Sprint PCS’ largest affiliate Alamosa Holdings Inc. said it has completed its $630 million acquisition of fellow affiliate AirGate PCS Inc.
The transaction combines Alamosa’s operations in the Midwest, Southwest and Western United States with AirGate’s operations in the Southeast. The new operation serves approximately 1.3 million subscribers and has a footprint covering parts of 19 states and 23.2 million potential customers.
“AirGate PCS represents our most significant acquisition of a Sprint affiliate to date and grows the population in our company’s licensed territory by approximately 50 percent,” said David Sharbutt, chairman and chief executive officer of Alamosa. “We now have more opportunities to sell Sprint services in some of the most attractive markets in the United States.”
Alamosa had previously acquired former affiliates Roberts Wireless Communications L.L.C., Washington Oregon Wireless L.L.C. and Southwest PCS Holdings Inc. in 2001.
The AirGate deal was initially announced in early December and called for AirGate shareholders to receive 2.87 Alamosa shares for each AirGate share owned. At the time the deal was announced, the transaction price valued AirGate’s stock at $33 per share.
AirGate shareholders were also given the option to receive cash consideration in place of Alamosa’s stock up to an aggregate amount of $100 million. Alamosa also said it would assume approximately $238 million of AirGate’s debt as part of the transaction.
Analysts’ noted that the deal would likely be favorable for Alamosa as it strengthens the carrier’s operations and provides greater growth opportunities. Alamosa is seen by many as a potential consolidator of some of the remaining 10 Sprint affiliates leading up to an eventual acquisition of all the affiliates by Sprint following the completion of its pending merger with Nextel Communications Inc.
