Sprint Nextel has finalized the acquisition of iPCS, and the $831 million deal will enable the mobile operator to continue to operate and roll out networks in the Midwest markets.
The completed merger means iPCS will become a wholly owned subsidiary of Sprint, and more than 700,000 iPCS subscribers will be counted as Sprint customers. The companies said existing customers should not experience any changes in service as a result of the merger. Sprint also said the deal will expand its service territory to cover an additional 12.6 million people, and it will lead to $30 million in operational synergies.
The deal will also end all pending litigation between the companies, which removes multiple hurdles for Sprint in the Midwest markets. The companies had been locked in contentious litigation regarding the operation of iDEN networks in Illinois, Indiana, Iowa, Michigan, Pennsylvania, and Tennessee. A court ruling a few months ago would have forced Sprint to divest some of its iDEN assets in these markets if the merger was not completed.
The deal faced a few bumps in the road, as a key investor in iPCS said the deal did not represent a fair value for the regional carrier. Sprint paid about $24 a share for iPCS, but the investment firm Greywolf Capital Management said an offer of $34 to $47 a share would have been more in line with what iPCS is worth. Greywolf only owned about 8% of the regional carrier though, and iPCS' board of directors unanimously recommended shareholders accept Sprint's bid.