Sprint Nextel absorbs two more affiliates

Sprint Nextel is continuing to resort to acquisition to resolve disputes that arose when several of Sprint's rural wireless affiliates separately filed lawsuits alleging that Sprint's merger with Nextel violated the conditions of its existing affiliate agreements. Sprint Nextel announced Tuesday that it had acquired affiliates IWO Holdings for $427 million and Gulf Coast Wireless Limited Partnership for $287.5 million in separate deals.

Sprint Nextel Corporation and Gulf Coast Wireless said they will seek an immediate stay of litigation pending in U.S. District Court in Middle District of Louisiana, with a final resolution to become effective upon the closing of the acquisition. The deal is expected to close in the fourth quarter. Gulf Coast Wireless, based in Baton Rouge, La., provides Sprint PCS services in southern Louisiana and Mississippi serving more than 95,000 direct wireless subscribers. It employs about 130 people and had 2004 revenues of $87.9 million.

IWO Holdings is based in Albany, N.Y., and through its Independent Wireless One unit provides Sprint PCS services in upstate New York, New Hampshire, Vermont and portions of Massachusetts and Pennsylvania, serving more than 237,000 direct wireless subscribers. It employs about 230 people and had 2004 revenues of approximately $187 million. As part of the acquisition, Sprint Nextel will assume $208 million in net debt. The deal price amounts to about $42.50 per share, and the deal is expected to close during the fourth quarter, according to a statement released by Sprint and IWO.

Throughout the last year, at least seven of the 11 companies that had joined Sprint's seven-year-old wireless affiliate program had filed legal action related to the Sprint Nextel merger. Before the IWO and Gulf Coast Wireless deals, Sprint had separately acquired another affiliate, U.S. Unwired, for $1.3 billion before the Sprint Nextel merger officially closed on Aug. 12.