Shentel to Sell Wireless Assets to T-Mobile for $1.95 Billion
Will use proceeds to pay down debt, issue special dividend to shareholders
Shenandoah Telecommunications (Shentel) said it will sell its wireless assets to T-Mobile, part of the larger telecom company’s purchase of Sprint last year, for $1.95 billion in cash and will use the proceeds to pay down some debt and issue a special cash dividend to its shareholders.
Shentel said the deal, expected to close in the second quarter, will bring it about $1.5 billion after taxes. Those proceeds will be used to pay down about $702 million in debt and to issue an $18.75 per share cash dividend to shareholders. Shentel shares closed at $42.23 each on Feb. 2 up 6.5%, or $2.59 each. The stock was priced at $50 per share, up 18.4% or $7.77 each, in pre-market trading Feb. 3.
T-Mobile purchased Sprint in April for $26 billion and as part of that deal had the right to exercise an option to purchase Shentel’s wireless assets after an appraisal process. Shentel has been a Sprint affiliate for its wireless service since 1999. That appraisal was conducted in 2020, ultimately pinning a $2.1 billion value on the operations . After a series of negotiations, the parties agreed on a $1.95 billion price.
Shentel’s wireless service has about 1.1 million customers and provides service in a six-state area covering all of West Virginia, the Western region of Virginia, Central Pennsylvania, Central Maryland and parts of Ohio and Kentucky. The unit has about 400 employees and generates about $400 million in revenue per year.
“We are pleased to provide clarity on the expected sale price of Shentel Wireless and our ability to return significant value to our shareholders,” said Shentel CEO Christopher French in a press release. “The expected transaction closing in the second quarter along with the continued rapid expansion of our Glo Fiber to the Home and Beam fixed wireless services are part of our transformation to a broadband centric company. Shentel has a long history of growth and technology innovation and we are very excited about the new opportunities to bring state-of-the-art broadband to our customers and create value for our shareholders.”
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Mike Farrell is senior content producer, finance for Multichannel News/B+C, covering finance, operations and M&A at cable operators and networks across the industry. He joined Multichannel News in September 1998 and has written about major deals and top players in the business ever since. He also writes the On The Money blog, offering deeper dives into a wide variety of topics including, retransmission consent, regional sports networks,and streaming video. In 2015 he won the Jesse H. Neal Award for Best Profile, an in-depth look at the Syfy Network’s Sharknado franchise and its impact on the industry.