RESTON, Va.-Sprint Nextel Corp. completed its $427 million acquisition of affiliate IWO Holdings Inc. The deal includes the assumption of approximately $208 million in debt.
IWO Holdings’ shareholders received $42.50 per share in cash from the deal. Sprint Nextel noted the transaction value represents 10.8 times earnings before interest, taxes, depreciation and amortization adjusted for the impact of special items for the 12 months ending June 30 and 8.5 times 2006 adjusted EBITDA.
IWO Holdings-which was spun off from fellow affiliate US Unwired Inc. earlier this year after IWO Holdings filed to reorganize-serves more than 237,000 subscribers and covers about 4.8 million potential customers in portions of New York, New Hampshire, Vermont, Massachusetts and Pennsylvania.
Sprint Nextel announced plans to acquire IWO along with fellow affiliate Gulf Coast Wireless L.P. in early September. The deals will add more than 330,000 direct customers to Sprint Nextel’s customer base, and more importantly, clear up litigation that was initiated following Sprint Corp.’s acquisition of Nextel Communications Inc. in early August.
In addition to its deals with IWO and Gulf Coast, Sprint Nextel acquired affiliate US Unwired Inc. for $1.3 billion and is in the process of determining the value of a possible acquisition of Nextel Partners Inc.
