Vodafone AirTouch Acquisition of CommNet Cellular to Expand AirTouch's Footprint in 9 Western States
Business Wire - July 19, 1999 08:28
SAN FRANCISCO and ENGLEWOOD, Colo.--(BUSINESS WIRE)--July 19, 1999--Vodafone
AirTouch Plc (NYSE:VOD) and CommNet Cellular Inc. (Nasdaq:CELS) today announced that
Vodafone AirTouch has agreed, through its subsidiary AirTouch Cellular, to purchase CommNet,
based in Englewood, CO, for $764 million in cash, plus debt which is expected to be about $600
million at the close of the transaction. CommNet is controlled by Blackstone Capital Partners II, a
private equity fund of The Blackstone Group, a private investment bank in New York.
The deal, which is expected to close in four to five months, will add vast new regions to AirTouch
Cellular's coverage area in the Western United States. 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.
CommNet's share of those markets today gives it access to about 3.6 million potential customers. It
has about 360,000 proportionate customers.
The purchase fills gaps in AirTouch's coverage area which until now have been served through costly
roaming agreements. AirTouch will now be able to extend service to communities such as Rapid City
and Sioux Falls, South Dakota; Sioux City, Iowa; Bismarck, North Dakota; Great Falls and Billings,
Montana; and Pueblo, Colorado.
"CommNet's markets are well managed and fit ours like hand in glove," said Chris Gent, CEO of
Vodafone AirTouch Plc. "This deal will allow customers to enjoy the benefits of AirTouch quality over
a much broader area. It will cut our roaming costs and offer significant marketing synergies, which will
enable us to improve the value we offer customers."
Under the terms of the agreement, shareholders of CommNet will receive $31 per share in cash, plus 8
percent annual interest from July 18, 1999 until closing.
Arnold C. Pohs, Chairman and CEO of CommNet, said, "This transaction joining CommNet with the
world's largest wireless telecommunications company is a true benefit for our shareholders,
subscribers, telephone company partners, employees and future customers. As the definitive provider
of cellular telephony to rural America, we know that our heritage of service and quality is now firmly
secure for the future."
Mark T. Gallogly, Senior Managing Director at The Blackstone Group who is responsible for the
firm's cable, communications and media investments, observed, "We have been privileged to partner
with an outstanding team at CommNet. Arnold Pohs, Dan Dwyer and their team have done a
tremendous job to maximize value for all CommNet shareholders. AirTouch is a world-class company
with the capability to grow CommNet to compete effectively on a national basis."
The transaction is subject to customary conditions including receipt of approval from the Federal
Communications Commission. Blackstone has agreed to vote in favor of the transaction. CommNet
was advised by Morgan Stanley Dean Witter, which delivered a fairness opinion, and the law firm of
Simpson Thacher & Bartlett.
AirTouch serves 9 million U.S. cellular and PCS customers on a proportionate basis. Its ventures
operate in 25 states and 22 of the top 30 U.S. markets, including Atlanta, Chicago, Dallas, Detroit,
Houston, Los Angeles, Miami, Phoenix, San Diego, San Francisco and Seattle. AirTouch is part of
Vodafone AirTouch Plc, the world's largest wireless communications firm, based in the United
Kingdom. It has mobile operations in 24 countries on five continents, with more than 28 million
proportionate cellular customers. For more information, visit the AirTouch web site at
www.airtouch.com.
The Blackstone Group is a private investment bank based in New York City. It was founded in 1985
by its Chairman, Peter G. Peterson, and its President and CEO, Stephen A. Schwarzman. Blackstone
is a leader in private equity investing, and is currently in the process of investing its Blackstone Capital
Partners III fund, which represents approximately $4 billion of equity capital. The Blackstone Group is
also engaged in five other business areas including Mergers and Acquisitions Advisory, Restructuring
and Reorganization Advisory, Private Equity Real Estate Investing, Private Mezzanine Investing, and
Liquid Alternative Asset Investing.
CONTACT: Vodafone AirTouch
Jonathan Marshall, 415/658-2209
or
CommNet Cellular
Dan Dwyer, 303/694-8568
or
The Blackstone Group |
