Nov. 8, 2008 — AT&T Inc. and Centennial Communications Corp. said Friday that AT&T plans to acquire Centennial, a regional provider of wireless and wired communications services, for nearly $1 billion in cash.
AT&T and Centennial both operate cell phone service in the Virgin Islands.
'"It's not going to mean a change in service," William L. Roughton, Centennial's vice president of legal and regulatory affairs, said Saturday from Washington, D.C.
However, the Centennial name will be gone when the sale is finalized. Roughton expects that to happen toward the end of the second quarter of 2009.
Roughton said that Centennial has 3,500 customers in the Virgin Islands. He did not have a figure for AT&T, but said it was the largest cell phone provider in the Virgin Islands. No one could be reached for comment at AT&T on Saturday.
According to a press release from AT&T, the transaction will enhance AT&T's wireless coverage for customers in the Virgin Islands, Puerto Rico and largely rural areas of the Midwest and Southeast United States. Centennial has 1.1 million customers in those locations.
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 wireless subscribers will have access to 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 get 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.
He said that AT&T's existing customers will enjoy better on-network calling in the current Centennial roaming areas. And Centennial customers will have access to a mobile-to-mobile network of nearly 75 million subscribers and AT&T's national and international roaming capabilities.
Centennial Chief Executive Officer Michael J. Small said the merger was a natural next step for the company.
"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," he said.
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 is subject to regulatory approval, 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.
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