Alltel Corporation, owner and operator of the largest US wireless network with 12 million customers, has agreed to be acquired by TPG Capital and GS Capital Partners, the private equity ar
Alltel Corporation, owner and operator of the largest US wireless network with 12 million customers, has agreed to be acquired by TPG Capital and GS Capital Partners, the private equity arm of Goldman Sachs, in a transaction valued at approximately USD27.5bn.
Under the terms of the agreement, TPG Capital and GSCP will acquire all of the outstanding common stock of Alltel for USD71.50 per share in cash, representing a premium of 23 per cent premium over the company’s closing share price ahead of media reports of a potential transaction published on December 29, 2006.
Alltel’s board of directors says it has unanimously approved the agreement after a comprehensive review of the company’s strategic options, and has recommended the approval of the transaction by shareholders. Scott Ford, Alltel’s chief executive, will remain in his position.
Completion of the transaction, which is currently expected to occur by the fourth quarter of this year or the first quarter of 2008, is contingent upon approval by Alltel’s shareholders and regulatory approval.
‘This transaction delivers substantial and certain value to our shareholders while providing the company with long-term partners who share our commitment to our customers, employees and the communities we serve,’ Ford says.
‘TPG and GSCP are long-term investors who are willing to make the investments necessary to continue to grow our wireless business in all our markets. This transaction also ensures our customers can continue to rely on Alltel to deliver high-quality service and leading edge products and services.’
‘Alltel is a great company with a terrific management team,’ says TPG founding partner Jim Coulter. ‘We look forward to working with them to continue to grow one of the nation’s premier wireless providers.’
Richard Friedman, head of the merchant banking division at Goldman Sachs, says: ‘Alltel has a long history of growth through strategic acquisitions, combined with a strong focus on customer service.’
Merrill Lynch, Stephens and JP Morgan Securities acted as Alltel’s financial advisors, and Wachtell, Lipton, Rosen & Katz acted as legal advisor. Citigroup and Goldman Sachs acted as financial advisors to TPG and GSCP; Cleary Gottlieb Steen & Hamilton acted as legal advisor to TPG; Weil Gotshal & Manges acted as legal advisor to GSCP, and Akin Gump Strauss Hauer & Feld acted as regulatory counsel to the buyers. Acquisition financing will be provided by Goldman Sachs, Citigroup, Barclays and RBS.
TPG Capital is the global buyout group of TPG, formerly known as Texas Pacific Group, a private equity firm founded in 1992 with more than USD30bn in assets under management and offices in San Francisco, London, Hong Kong, New York, Minneapolis, Fort Worth, Melbourne, Menlo Park, Moscow, Mumbai, Shanghai, Singapore and Tokyo.
TPG Capital has extensive experience with global public and private investments executed through leveraged buyouts, recapitalisations, spin-outs, joint ventures and restructurings, and its investments span industries including communications, technology, healthcare, retail and consumer, travel, media, industrials and financial services.
Since 1986, Goldman Sachs has raised thirteen private equity and mezzanine investment funds totalling USD56bn in capital commitments. GS Capital Partners, the private equity vehicle through which the Goldman Sachs Group conducts its privately negotiated corporate equity investment activities, is currently investing its GS Capital Partners VI fund.
