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July 19, 1999
Vodafone AirTouch Agrees to Acquire
CommNet for $764 Million, Plus Debt
Dow Jones Newswires
LONDON -- Mobile-phone operator Vodafone AirTouch PLC on Monday said it has agreed to buy CommNet Cellular Inc. for $764 million in cash and the assumption of about $600 million in debt.
Vodafone's Purchase of AirTouch Gains the Approval of the FCC (June 24)
The world's biggest wireless-communications firm said it would make the acquisition through its AirTouch Cellular unit, which is bought earlier this year for about $70 billion. CommNet, which operates cellular phone systems in the western U.S., is majority owned by Blackstone Capital Partners II, a private equity fund of New York-based investment bank Blackstone Group. CommNet, Englewood, Colo., had $171.4 million in revenue for fiscal 1998.
Vodafone AirTouch said it would pay $764 million in cash and would take on CommNet's debt, which is expected to be about $600 million when the deal closes. Vodafone said CommNet shareholders will receive $31 per share in cash, plus 8% annual interest on that sum from July 18 until the deal closes. CommNet shares closed Friday at $31.25.
In midday trading Monday on the Nasdaq Stock Market, shares of CommNet were up 37.5 cents to $30.625.
Vodafone said the purchase fills gaps in AirTouch's western U.S. coverage area, which has been served through costly roaming agreements. "CommNet's markets are well managed and fit ours like a hand in a glove," said Vodafone AirTouch Chief Executive Chris Gent. "This deal will cut our roaming costs and offer significant marketing synergies."
CommNet offers service in most of Colorado, Montana, North Dakota, South Dakota, Utah and Wyoming and parts of Idaho, Iowa and New Mexico. It also owns minority interests in operations in three other states. Vodafone said CommNet's share of those markets gives AirTouch access to 3.6 million potential customers. AirTouch has nine million U.S. cellular and PCS customers in 25 states.
Vodafone said the deal is expected to close in "four to five months" and is subject to "customary conditions," including U.S. Federal Communications Commission approval.
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