Sprint Nextel and Alamosa Holding, Inc announced that the national carrier will be purchasing it largest affiliate in a cash deal valued at $4.3 billion. The deal includes taking on the affiliate’s $900 million in debt, and will convert Alamosa’s approximately 1.5 million subscribers in 19 states into direct subscribers.
The deal is for Sprint to cash-purchase Alamosa’s common stock at a price of $18.75. On the news, Alamosa stock rose to $18.39 from $16.17 before trading in the stock was halted. Together with $427 million for IWO Holdings, $287.5 million for Gulf Coast Wireless, and $1.6 billion for U.S. Unwired, Sprint Nextel has spent more than $6.6 billion appeasing litigious affiliates that have opposed the merger with Nextel.
And the appraisal of Nextel Partners is still to happen. Once that completes, including the wrangling between the two different appraisers chosen by Sprint Nextel and by Nextel Partners, Sprint Nextel will be obligated to purchase the 68% of Nextel Partners stock it doesn’t already own.
Alamosa Shareholders still must approve the deal, and regulatory OK has to be completed also. Pending both of those conditions, the deal should close in the first quarter of 2006. The $4.3 billion Sprint Nextel is putting into Alamosa represents almost 10 times Alamosa’s earnings before depreciation and amortization.