( SHEN ) in an all-cash deal valued at about $640 million, including net debt.
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Meanwhile, concurrent to the merger agreement, Shentel has entered into a series of agreements with Sprint Corp, including the expansion of Shentel’s “affiliate” relationship with Sprint.
The nTelos brand will be discontinued after the close of the deal and around 297,500 wireless retail customers will become Sprint-branded customers. Sprint will also give Shentel its retail stores in the nTelos footprint and reduce retained revenues owed to Sprint under the affiliate agreement by $252 million over the next five to six years.
Financials on the proposed transaction call for Ntelos shareholders to receive $9.25 per share, which Shenandoah said is a 60% premium over Ntelos’ average price over the past 30 days.
“This is an exciting time for all of the members of the Shentel team”, said Christopher E. French, President and CEO of Shentel in a release.
Upon closing of Shentel’s purchase of nTelos, Sprint will receive nTelos spectrum covering 5.4 million POPs in parts of Virginia, West Virginia, Pennsylvania, Maryland, Ohio, Kentucky and North Carolina.
After taking into account the payments from Sprint for the exchange of certain assets, ShenTel net consideration of the nTelos acquisition will be $330 million.
Edinburg-based Shenandoah Telecommunications companies provide local and long distance telephone, Internet and data services, cable television, wireless voice and data services, alarm monitoring, and telecommunications equipment in the mid-Atlantic and Southeastern United States.
The acquisition is expected to close by early 2016. Shentel will terminate the existing network wholesale agreements between Sprint and nTelos, continue to upgrade the nTelos network to LTE and expand coverage in the areas with at least an additional 150 sites over the next three years, using spectrum acquired by Sprint and made available to Shentel as part of the deal.
Upon closure of the transaction, nTelos customers will be transitioned to the Sprint brand and will increase Shentel’s wireless customer base in the region to over one million.
Sprint (NYSE: S) is a communications services company that creates more and better ways to connect its customers to the things they care about most. “Focusing on our western markets, where we benefit from a strong branded retail presence and access to multiband spectrum in the (Sprint agreement) territory, will allow us to make additional investments to improve the experience of our customers”.
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The previously announced wind down of commercial operations in NTELOS’s Eastern Markets will continue as planned and is expected to be completed by November 15.
