Alltel makes $1.65 billion acquisition

Alltel has announced it is to purchase all the wireless properties owned by CenturyTel Inc. for $1.65 billion in cash.

Alltel has announced an agreement to purchase all the wireless properties owned by CenturyTel Inc. for $1.65 billion in cash.

According to a statement, Alltel will finance the purchase through a combination of debt and equity or equity-linked securities with the goal of maintaining its A/A2 credit rating.

The company is said to have received committed interim financing from Merrill Lynch and Bank of America, in addition to existing credit facilities, that can be used for both this transaction and Alltel’s pending acquisition from Verizon of 600,000 Kentucky wireline customers.

Alltels’s acquisition of CenturyTel’s wireless properties is expected to be slightly dilutive to earnings in 2002 and break-even or better in 2003.

The transaction is expected to close in the third quarter of 2002. To ensure these properties maintain their operational and financial performance prior to closing, CenturyTel has agreed to maintain capital expenditures and sales and marketing spending, in addition to other customary operating covenants.

The acquisition will reportedly increase Alltel’s share of wireless customers to 7.4 million in 24 US states.

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