Rural telecommunications and wireless services provider Ntelos Inc. said it has entered into an agreement with affiliates of Quadrangle Capital Partners LP and Citigroup Venture Capital that calls for the recapitalization and sale of Ntelos to Quadrangle and CVC. Published reports indicated a total sale price of more than $700 million.
Ntelos said the initial stages of the transactions include the company refinancing its existing debt and repurchasing up to 75 percent of its existing equity in a self-tender offer at a price of $40 per common share. The company noted that it has received commitments from lenders for a senior secured first lien bank financing in the form of a $400 million term loan facility, $35 million in a revolving credit facility and $225 million in a senior secured second lien term loan facility.
Once the first stage is complete, the deal calls for Quadrangle and CVC to purchase up to 24.9 percent of the post-recapitalization equity of the company, also at $40 per share. Following regulatory approval, Quadrangle and CVC will acquire the remainder of Ntelos’ equity at $40 per share in a merger transaction.
Ntelos, which became a private company after emerging from bankruptcy protection in 2003, noted that its two current largest shareholders-Morgan Stanley & Co. Inc. and affiliates of Capital Research and Management Co.-have agreed to the transaction.
Ntelos also reported $334 million in consolidated operating revenues, $55 million in consolidated operating income and $39 million in consolidated net income for 2004. In addition, the company said it expects to post approximately $120 million in earnings before interest, taxes, depreciation and amortization for last year.
Ntelos, which previously served as a partner of Sprint PCS affiliate Horizon PCS Inc., operates a CDMA-based wireless network covering parts of Virginia, West Virginia, Kentucky and North Carolina.
