AT&T to Acquire Centennial Communications, Enhance Service for Wireless Customers and Businesses
Dallas, Texas, Wall, New Jersey.- AT&T Inc. (NYSE:T) and Centennial Communications Corp. (Nasdaq:CYCL) today announced that AT&T plans to acquire Centennial, a regional provider of wireless and wired communications services, for $944 million in cash. The transaction will enhance AT&T’s wireless coverage for customers in largely rural areas of the Midwest and Southeast United States and in Puerto Rico and the U.S. Virgin Islands. With the addition of Centennial’s wired network in Puerto Rico, AT&T will also be able to better serve the company’s business customers who operate there.
As a result of the acquisition, Centennial’s 1.1 million wireless subscribers — many of them in rural areas — will have access to the wireless network with the best global coverage and to the nation’s premier lineup of innovative wireless devices, including iPhone 3G, an AT&T exclusive. Centennial’s customers who choose select smartphones — such as the BlackBerry® Bold™, another AT&T exclusive — and AT&T LaptopConnect cards will also enjoy free access to the nation’s largest Wi-Fi network.
“Mobility is a vital investment area for AT&T and our company’s biggest growth driver,” said Ralph de la Vega, president and chief executive officer of AT&T Mobility and Consumer Markets. "This transaction enhances network coverage for our consumer and business customers and is expected to create long-term value for AT&T’s stockholders.
“This acquisition offers important benefits for wireless customers of both AT&T and Centennial,” de la Vega said. “Our existing customers will enjoy a better on-network calling experience in the current Centennial roaming areas. And Centennial customers will have access to a mobile-to-mobile network of nearly 75 million subscribers, AT&T’s national and international roaming capabilities, our terrific device offerings and our great portfolio of applications and services.”
The Centennial acquisition demonstrates AT&T’s commitment to continuously enhance network quality and coverage for its wireless customers. The addition of Centennial’s high-quality 850 MHz spectrum will improve service quality for AT&T customers in parts of Indiana, Louisiana, Michigan, Mississippi, Ohio and Texas.
Centennial also provides switched voice and high-capacity data and Internet Protocol solutions for business customers in Puerto Rico. The transaction gives AT&T a network presence in Puerto Rico and will allow the company to better serve its multinational business customers with a presence in this U.S. territory.
“Centennial has a 20-year history of doing what is best for our customers, and this transaction is a natural next step for us,” said Michael J. Small, CEO of Centennial. "As a result of this merger, our wireless customers will enjoy greatly expanded network coverage and access to AT&T’s wide range of innovative products and services. Our business customers will benefit from AT&T’s expertise in delivering networking services and solutions to businesses of all sizes.
“I thank our associates for their dedication and hard work in always rising to the challenges of our rapidly changing industry, and I take pride that our company will become part of a world-class organization like AT&T.”
Under terms of the agreement, Centennial stockholders will receive $8.50 per share for a total equity price of $944 million. Including net debt, the total enterprise value is approximately $2.8 billion. AT&T expects the proposed transaction to deliver significant value to its stockholders. The acquisition offers opportunities for synergies in areas including corporate overhead, advertising, customer care and network operations. In the first year after the transaction closes, AT&T expects minimal dilution to EPS and cash flow, driven by upfront integration costs.
The acquisition is subject to regulatory approval, the approval of Centennial’s stockholders and other customary closing conditions. Welsh, Carson, Anderson & Stowe, Centennial’s largest stockholder, has agreed to vote in support of this transaction. AT&T is working to obtain approvals by the end of the second quarter of 2009.
Centennial’s 1.1 million wireless customers are in Puerto Rico and the U.S. Virgin Islands as well as in Kalamazoo, Cass City, Newaygo, Battle Creek, Benton Harbor, Jackson, Roscommon, Allegan, Grand Rapids, Lansing, Muskegon and Saginaw-Bay City, Mich.; Miami, Kosciusko, Huntington, Kokomo, Muncie, Anderson and Lafayette, Ind.; Lima and Findlay-Tiffin and Williams County, Ohio; Lafayette, Alexandria, Iberville, Bastrop and Lake Charles and Caldwell, West Feliciana, Beauregard and DeSoto parishes, La.; Beaumont-Port Arthur, Texas; and Claiborne and Copiah counties, Miss.
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