T-Mobile and Shenandoah Telecommunications Company (Shentel) settled their dispute over the purchase price of Shentel’s wireless assets, with the final price coming in at $1.95 billion.
T-Mobile revealed last year that it was going to buy Shentel’s wireless assets after its merger with Sprint was finalized. That wasn’t always a done deal, as other options were on the table. Ultimately, the agreement of a sale was reached, but they had to go through an appraisal process to finally come to terms on a price.
The process valued Shentel’s wireless assets at $2.10 billion; the agreement called for the base purchase price to be 90% of the entire business value, subject to other price adjustments.
Shentel was a Sprint affiliate since 1995 and was still using the Sprint brand post-merger. Shentel had about 1.1 million subscribers as of June 30, 2020.
T-Mobile and Shentel expect the transaction will close in the second quarter 2021 after satisfying customary closing conditions and obtaining required regulatory approvals.
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When the deal was first announced last year, New Street Research analysts said the transaction came as little surprise given the options facing T-Mobile for resolving Sprint’s affiliate agreement with the company. They concluded it should result in the addition of 1.1 million subscribers to T-Mobile, clearing “a minor roadblock on the path to unlocking value” at T-Mobile.
The company will hold a conference call tomorrow to discuss the sale, as well as its expected use of the proceeds and its financial outlook for 2021.
Shentel, headquartered in Edinburg, Virginia, also offers cable and wireline services. In 2016, it acquired nTelos, a provider of wireless services in portions of Virginia, West Virginia, Maryland, North Carolina, Ohio, Pennsylvania and Kentucky.
With Shentel’s wireless business going to T-Mobile, it’s the end of the era of Sprint affiliates. Last month, T-Mobile announced an agreement to buy Sprint-branded assets from Brookings Municipal Utilities (BMU), which has been using the Swiftel brand, serving parts of South Dakota and Iowa.
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The affiliate program started in the 1990s; some of Sprint’s affiliates were Alamosa PCS, Ubiquitel PCS and iPCS, which ultimately ended up being acquired by Sprint.