PORTLAND, Ore.-Sonera Corp. announced it will invest $68 million to purchase one-fourth of Metro One Telecommunications.
The deal gives Metro One enough capital to pay down about $35 million in debt, which will save the company about $4 million in interest savings from annual pretax income. The company said it will have about $30 million in cash after repaying the debt for future growth. After the transaction, Metro One said it will have about $100 million in borrowing capability and $100 million in shareholder equity.
The plan calls for Sonera to purchase 4 million shares of Metro One common stock at $17 per share. This will give Sonera a seat on Metro One’s board of directors, and the company will be able to acquire up to one-third of Metro One through open-market purchases or “otherwise,” according to a statement released by the companies. Sonera said the agreement will allow it to offer directory services by acquiring, processing and distributing content through various channels.
The companies also agreed to start a business cooperation in hopes of further developing enhanced directory and other services.
“On behalf of our shareholders, we are pleased to enter into a financially attractive transaction with such a well-positioned `credentializing’ investor,” said Timothy Timmins, Metro One’s president and chief executive officer. “Additionally, our partnership with Sonera should allow us to leapfrog our own past efforts on the electronic side of the telephony business, particularly in the areas of Wireless Application Protocol, wireless Web, enhanced messaging and e-business.”
The companies said they hope the transaction, which is expected to close by the end of this year, is a step toward the development of a global network of enhanced services providers.
