June 10, 2009
Atlantic Tele-Network Acquires Some Verizon Wireless Customers
This sounds like good news for ATNI - I had been worried about the revenue streams with both the Guyana situation and the threat of competition from Digicel - but this story seems to be a solid new revenue generator:
SALEM, Mass.--(BUSINESS WIRE)--Atlantic Tele-Network, Inc. (NASDAQ:ATNI - News) today announced a definitive agreement to acquire certain wireless assets from Verizon Wireless for $200 million. Under terms of the agreement, ATN will acquire wireless properties, including wireless spectrum licenses and network assets, serving over 800,000 subscribers primarily in rural areas across Georgia, North Carolina, South Carolina, Illinois, Ohio, and Idaho. Verizon Wireless is required to divest these properties as part of the regulatory approvals granted for its purchase of Alltel earlier this year.
Under terms of the agreement, ATN will purchase the assets for $200 million in cash. ATN expects to fund substantially all of the purchase price with cash-on-hand and borrowings under its existing credit facility. As of April 30, 2009, ATN had approximately $90 million in cash and cash equivalents, $75 million of available borrowings under its undrawn revolving credit facility, and an additional $50 million of borrowing capacity, subject to lender consent, under its term credit facility.
The acquisition is subject to customary closing conditions and regulatory approvals, including the receipt of required consents and approvals from the Department of Justice (DOJ) and the Federal Communications Commission (FCC.) ATN's obligation to close the transaction is not subject to any financing condition. ATN expects the transaction to close in the third or fourth quarter of 2009.
"This is a very attractive transaction for ATN and it accomplishes what we have been patiently seeking over the past few years," said Michael Prior, ATN's President and Chief Executive Officer. "It provides ATN with enhanced scale and revenue diversification and enables us to expand meaningfully our US wireless business. Coupled with our existing US wireless operations, we will now have significant wireless operations in rural areas of more than 10 states. Including our international operations, we expect to have more than 1,000,000 retail wireless subscribers by transaction close. We believe that our long history of operating success in comparable markets, combined with our financial resources, makes these businesses an ideal fit for us. We aim to further develop these markets for customers who want the attention and flexibility of a local operator. We look forward to transitioning the employees and subscribers of the acquired businesses to ATN and to continue building our wireless business."