NXTL still firing on all cylinders:
By Renae Merle
Washington Post Staff Writer
Thursday, August 15, 2002; Page E05
Nextel Communications Inc., the nation's fifth-largest cellular phone company, said yesterday that it plans to acquire NeoWorld Communications Inc. for more than $260 million.
The deal would give Nextel access to more wireless spectrum in a dozen large cities, including Los Angeles, Washington and New York. That would allow Reston-based Nextel to expand its coverage area, add customers and introduce new technology, said company spokeswoman Elizabeth Brooks.
"It's an attractive spectrum to us and easy for us to grow into," she said.
The final price of the deal hasn't been determined, but Nextel has already made a $43 million payment, according to a Securities and Exchange Commission filing. The company said it will make another payment of $220 million to $230 million by the first quarter of next year. That could make the final purchase price as high as $273 million.
The acquisition should close by early next year, the company said.
The deal is actually rooted in spectrum licenses that Nextel bought three years ago from GeoTek, a predecessor to NeoWorld, Brooks said. After a court fight, Nextel was granted the option to buy NeoWorld this year, she said.
No employees of privately held NeoWorld, which acted as a holding for the spectrum licenses, should be affected by the acquisition, she said.
The acquisition is part of a growth strategy for Nextel, Brooks said. "Buying spectrum is just part of the game. It is the bread and butter of our business."
Nextel reported its first-ever profit during the second quarter, with net income of $123 million -- a rarity in the struggling telecommunications industry. There are too many variables for the company to predict how much revenue the NeoWorld acquisition would add to its results, Brooks said.
It's a small transaction that the company typically would not report, but the possibility of issuing new stock to pay for the deal spurred management to disclose it, she said.
In its SEC filing, the company said it would also test a new service aimed at the youth market, but Brooks declined to provide details. |
