Just beating a federally mandated deadline, Verizon Wireless sold off its Chicago interests in PrimeCo Personal Communications last week to a telecommunications investment group led by Southern California-based Clarity Partners L.P. Other members of the investment group include Pacific Capital Group Inc., Trimaran Capital Partners L.L.C., Green Leaf Ridge Co. L.L.C., J.P. Morgan Partners and Tregan Partners L.P.
Verizon Communications was forced by the Department of Justice to sell PrimeCo’s Chicago market by June 26 to meet antitrust and spectrum cap requirements after Verizon’s formation last year. The telecommunications company was formed through the merger of GTE Corp. and Bell Atlantic, and the U.S. wireless assets of Bell Atlantic, PrimeCo and Vodafone Airtouch. After the formation, Verizon ended up owning both Ameritech Cellular and PrimeCo’s Chicago holdings. PrimeCo has been operating as an independent operator since the DOJ decision last year under court-appointed trustee Joseph Simons, who was a senior partner at Clifford Chance Rogers & Wells.
The sale, valued at approximately $600 million, included the PrimeCo brand name, a 20 MHz personal communications services license covering 13 million potential customers in the Chicago area and 34 locally owned stores. PrimeCo currently controls 13 percent of the Chicago market, though Clarity said it plans to expand into other major urban markets in the future.
“PrimeCo is indeed a jewel, with an incredibly well designed and constructed network, a terrific customer base and a long-standing and valuable brand name,” said Barry Porter, managing general partner at Clarity Partners. “All of the new owners are committed to providing management with the resources to build upon this incredible base to achieve our shared goal to make PrimeCo the most entrepreneurial, most competitive, most locally focused and most successful independent company in the United States.”
Verizon also sold some of its wireless holdings in San Diego, San Francisco and Houston last year to AT&T Wireless to comply with DOJ requirements.
Clarity said PrimeCo expects more than $250 million in service revenues this year, and noted a public offering of stock is possible in the future. Clarity plans to continue using the PrimeCo name in the Chicago market and operate with the current staff of 540 employees and the current management team.
“There have been numerous parties circling our gem and we are thrilled that this group of experienced and competitive investors, who are committed to continuing to provide extraordinary service to our local customers, has prevailed,” said Kraig Pyer, vice president of PrimeCo. “Our goal has been to provide the Chicago market with the best wireless service and now with the ownership transitioning to a group focused exclusively on our markets, we can continue to do so. PrimeCo services and retail stores will continue business as usual and will retain the PrimeCo name.”
