BASKING RIDGE, N.J., and LITTLE ROCK, Ark., June 5 /PRNewswire/ --
Verizon Wireless has entered into an agreement with Alltel Corporation and
Atlantis Holdings LLC, an affiliate of private investment firm TPG Capital
and GS Capital Partners, to acquire Alltel Corporation in a cash merger.
Verizon Wireless is a joint venture of Verizon Communications (NYSE: VZ)
and Vodafone (NYSE and LSE: VOD).
Under the terms of the agreement, Verizon Wireless will acquire the
equity of Alltel for approximately $5.9 billion. Based on Alltel's
projected net debt at closing of $22.2 billion, the aggregate value of the
transaction is $28.1 billion.
The parties are targeting completion of the merger by the end of the
year, subject to obtaining regulatory approvals.
Once this transaction closes, customers of both companies will have
access to an expanded range of products and services, including a premier
lineup of basic and advanced devices and an expanded IN Network calling
community. Alltel customers also will benefit from advanced services
including over-the- air downloadable music from a three-million-song
library, and a network that is nationwide, for a uniform coast-to-coast
experience. They also will be able to take advantage of industry-leading
consumer policies, including Test Drive and Worry Free Guarantee(R).
"This move will create an enhanced platform of network coverage,
spectrum and customer care to better serve the growing needs of both Alltel
and Verizon Wireless customers for reliable basic and advanced broadband
wireless services," said Lowell McAdam, Verizon Wireless president and
chief executive officer.
Alltel serves more than 13 million customers in markets in 34 states.
This includes 57 primarily rural markets that Verizon Wireless does not
serve. The transaction puts the Alltel markets and customers on a path to
advanced 4th generation services as Verizon Wireless deploys LTE technology
throughout its network over the next several years. Alltel's customers also
will reap the benefits of Verizon Wireless' Open Development initiative,
which welcomes third-party devices and services to use the Verizon Wireless
network.
Verizon Communications, the owner of the majority stake in Verizon
Wireless, expects that the transaction will be immediately accretive,
excluding transaction and integration costs. "This is a perfect fit, with
Alltel's high-value post-paid customer base, its solid financials, our
common network technology, and significant, readily attainable synergies,"
said Ivan Seidenberg, Verizon chief executive officer and chairman of the
Verizon board. "Verizon Wireless' acquisition of Alltel clearly provides
opportunities for enhanced value for Verizon shareholders."
Alltel President and Chief Executive Officer Scott Ford will continue
in his current position as head of Alltel until the merger is completed.
"Both Alltel and Verizon Wireless have long track records of delivering
a high-quality customer experience in the marketplace," Ford said. "The
combination of our two companies will continue and improve upon that
heritage as, together, we can more quickly deliver an expanded range of
innovative products and services to our customers."
Verizon Wireless expects to realize synergies with a net present value,
after integration costs, of more than $9 billion driven by reduced capital
and operating expense savings. Synergies are expected to generate
incremental cost savings of $1 billion in the second year after closing.
Alltel and Verizon Wireless both use a common network technology, which
provides advantages of a seamless transition for Alltel customers, ease in
integrating the two companies' networks, and scale efficiencies in
operating the larger integrated network.
Morgan Stanley acted as financial advisor to Verizon Wireless on this
transaction and is providing bridge financing. Debevoise & Plimpton LLP
acted as legal advisor to Verizon Wireless.
Citibank, Goldman Sachs and RBS advised the sellers on the transaction.
Wachtell, Lipton, Rosen & Katz acted as legal advisor to Alltel, and Cleary
Gottlieb Steen & Hamilton LLP and Ropes & Gray LLP acted as legal advisors
to the sellers.
About Verizon Wireless
Verizon Wireless operates the nation's most reliable wireless voice and
data network, serving 67.2 million customers. Headquartered in Basking
Ridge, N.J., with 69,000 employees nationwide, Verizon Wireless is a joint
venture of Verizon Communications (NYSE: VZ) and Vodafone (NYSE and LSE:
VOD). For more information, go to: http://www.verizonwireless.com. To preview and
request broadcast- quality video footage and high-resolution stills of
Verizon Wireless operations, log on to the Verizon Wireless Multimedia
Library at http://www.verizonwireless.com/multimedia.
About Alltel
Alltel delivers voice and advanced data services nationwide to more
than 13 million customers. Headquartered in Little Rock, Arkansas. Alltel
is a Forbes 500 company with annual revenues of nearly $9 billion.
About TPG Capital
TPG Capital is the global buyout group of TPG, a leading private
investment firm founded in 1992 with more than $50 billion of assets under
management and offices in San Francisco, London, Hong Kong, New York,
Minneapolis, Fort Worth, Menlo Park, Washington, D.C., Melbourne, Moscow,
Mumbai, Paris, Luxembourg, Beijing, Shanghai, Singapore and Tokyo. TPG
Capital has extensive experience with global public and private investments
executed through leveraged buyouts, recapitalizations, spinouts, joint
ventures and restructurings. TPG Capital's investments span a variety of
industries including media and communications, financial services, travel
and entertainment, technology, industrials, retail, consumer and
healthcare. Please visit http://www.tpg.com.
About GS Capital Partners
Since 1986, Goldman Sachs has raised fourteen private equity and
mezzanine investment funds aggregating $69 billion of capital and leverage
commitments. GS Capital Partners is the private equity vehicle through
which The Goldman Sachs Group, Inc. conducts its privately negotiated
corporate equity investment activities. GS Capital Partners is currently
investing its GS Capital Partners VI fund. GS Capital Partners is a global
private equity group with a focus on large, sophisticated business
opportunities in which value can be created through leveraging the
resources of Goldman Sachs.
NOTE: This news release contains statements about expected future
events and financial results that are forward-looking and subject to risks
and uncertainties. For those statements, we claim the protection of the
safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995. The following important factors
could affect future results and could cause those results to differ
materially from those expressed in the forward-looking statements:
materially adverse changes in economic and industry conditions and labor
matters, including workforce levels and labor negotiations, and any
resulting financial and/or operational impact, in the markets served by us
or by companies in which we have substantial investments; material changes
in available technology, including disruption of our suppliers'
provisioning of critical products or services; the impact of natural or
man-made disasters or litigation and any resulting financial impact not
covered by insurance; technology substitution; an adverse change in the
ratings afforded our debt securities by nationally accredited ratings
organizations; the final results of federal and state regulatory
proceedings concerning our provision of retail and wholesale services and
judicial review of those results; the effects of competition in our
markets; the timing, scope and financial impacts of our deployment of
fiber-to-the-premises broadband technology; the ability of Verizon Wireless
to continue to obtain sufficient spectrum resources; changes in our
accounting assumptions that regulatory agencies, including the SEC, may
require or that result from changes in the accounting rules or their
application, which could result in an impact on earnings; and the ability
to complete acquisitions and dispositions.
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SOURCE Verizon Wireless
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Related links:
http://www.verizonwireless.com
http://www.tpg.com
CONTACT:
Peter Thonis, +1-212-395-2355,
Peter.Thonis@verizon.com, or Jim Gerace, +1-908-559-7508,
James.Gerace@verizonwireless.com, or Nancy Stark,
+1-908-559-7520, Nancy.Stark@verizonwireless.com, or Andrew
Moreau, +1-501-905-7062, Andrew.Moreu@alltel.com; or Vodafone
Investor Relations, +44(0)1635-664-447, or Media Relations,
+44(0)1635-664-444
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