first_imgJuly 30, 2007Verizon Wireless To Acquire Rural Cellular Corporation,Expand The Nation’s Most Reliable Wireless NetworkAcquisition Will Expand Coverage In Rural Markets In 15 StatesBasking Ridge, NJ ­– In a move to expand its wireless service coverage inrural markets, Verizon Wireless, a joint venture of Verizon Communications(NYSE:VZ) and Vodafone (NYSE and LSE: VOD), announced today that it hasentered into an agreement to acquire Rural Cellular Corporation(NASDAQ:RCCC), for approximately $2.67 billion in cash and assumed debt.The acquisition will further enhance Verizon Wireless¹ network coverage inmarkets adjacent to its existing service areas. The combination willincrease Verizon Wireless coverage by 4.7 million licensed POPs(population), and increase its customer base by more than 700,000.”Verizon Wireless continually looks for opportunities to enhance ourcustomers’ wireless experience,” said Lowell McAdam, president and CEO ofVerizon Wireless. “The addition of Rural Cellular¹s markets will enable usto expand our services into areas where previously we had little or nopresence, and will give Rural Cellular¹s Unicel customers access to thenation¹s most reliable network and a broader range of voice and dataservices.”Richard Ekstrand, president and CEO of Rural Cellular Corporation, said,”Since the founding of Rural Cellular Corporation in 1990, our mission hasbeen to provide wireless service to rural areas across the country wheretourism, agriculture and small businesses are prevalent. Our employees aredeservedly proud of the tremendous growth and strong financial performancewe have achieved, while we continued to focus on providing innovativesolutions through wireless technologies and maximizing customersatisfaction.”Today, as the wireless industry continues to evolve, our Board of Directorshas concluded that it is in the company’s best interest to enter into a saletransaction with Verizon Wireless. As the nation’s leading wirelessprovider, Verizon Wireless has the resources and scale to provide a widerange of outstanding products and services to our customers, while alsooffering new opportunities for many of our employees.”Rural Cellular’s network served 716,000 customers as of March 31, 2007,spread across five regional territories. Its networks are located in thestates of Maine, Vermont, New Hampshire, New York, Massachusetts, Alabama,Mississippi, Minnesota, North Dakota, South Dakota, Wisconsin, Kansas,Idaho, Washington, and Oregon.Rural Cellular utilizes both CDMA and GSM technology separately across itsfive regional markets. Verizon Wireless plans to deploy CDMA service inRural Cellular’s existing GSM markets and convert the GSM customers to CDMAservice. Verizon Wireless, however, anticipates maintaining RuralCellular¹s existing GSM networks to continue serving the roaming needs ofother GSM carriers¹ customers.Verizon Wireless expects to realize more than $1 billion in synergies inreduced roaming and operations expenses. The addition of the new marketswill also offer the company additional upside growth opportunities.Deal TermsUnder terms of the agreement, approved by the boards of both companies,holders of Rural Cellular’s common stock will receive $45 per share in cashfor a total equity price of $757 million on a fully diluted basis.Including net debt as of the first quarter of 2007, the total transactionvalue is approximately $2.67 billion. The $45 price per share represents a16 percent premium to the average closing price over the last 10 tradingdays and a 41 percent premium to the last closing price of $31.88 on Friday,July 27, 2007.The acquisition, which is subject to governmental and regulatory approvaland approval of Rural Cellular’s shareholders, is expected to close in thefirst half of 2008.About Verizon WirelessVerizon Wireless operates the nation’s most reliable wireless voice and datanetwork, serving 62.1 million customers. The largest U.S. wireless companyand largest wireless data provider, based on revenues, Verizon Wireless isheadquartered in Basking Ridge, N.J., with 67,000 employees nationwide. Thecompany is a joint venture of Verizon Communications (NYSE: VZ) and Vodafone(NYSE and LSE: VOD). Find more information on the Web atwww.verizonwireless.com(link is external)About Rural Cellular CorporationRCC, based in Alexandria, Minnesota, provides wireless communicationservices under the Unicel brand to Central, Midwest, Northeast, South andNorthwest territories located in 15 states. For additional informationabout Rural Cellular Corporation, please refer to its web site atwww.unicel.com(link is external).last_img

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