U.S. Cellular to Buy PrimeCo Assets
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CHICAGO (AP) _ U.S. Cellular Corp. said Friday it agreed to pay about $610 million in cash to acquire the Chicago-area wireless assets of PrimeCo Wireless Communications LLC.
U.S. Cellular, a cellular phone systems company, said the purchase is aimed at strengthening its Midwest market.
Through the acquisition, U.S. Cellular will gain about 350,000 additional customers, 21 retail stores, 513 cell sites and almost 490 employees.
``This is another step in an edge-out acquisition strategy,″ a U.S. Cellular spokesman said. Although based in Chicago, U.S. Cellular didn’t compete in the city’s market, but rather in surrounding areas.
U.S. Cellular, which is 80 percent-owned by Telephone & Data Systems Inc., intends to finance the purchase from various sources to include bank and bond financing. In connection with the deal, the company also said it will file a Form S-3 with the Securities and Exchange Commission for $500 million relating to debt securities.
The proposed deal is subject to certain conditions, including governmental and regulatory approvals, and completion of financing. It is expected to close in the third quarter.
U.S. Cellular, which had sales of $1.89 billion in 2001, currently has more than 3.5 million customers in 148 markets in 25 states.
PrimeCo, which bills itself as the oldest wireless brand in the Chicago market, posted revenue of about $230 million last year.
The spokesman said U.S. Cellular plans to add PrimeCo’s approximately 490 employees to the company’s existing work force of 5,700.
U.S. Cellular shares fell $2.22 late Friday to $38.31.