March 17, 2005- iPCS and Horizon PCS Announce Merger of Equals; Combined Company will be second largest wireless Affiliate of Sprint in terms of Covered POPs with 11.2 million Covered POPs and will have 432,000 subscribers
SCHAUMBURG, Ill. & CHILLICOTHE, Ohio. iPCS, Inc. (Pink Sheets:IPCX) and Horizon PCS, Inc. (Pink Sheets:HZPS), both wireless Affiliates of Sprint, today announced that their respective boards of directors have approved, and the parties have executed, a definitive agreement under which Horizon PCS will merge with and into iPCS, Inc. Under the terms of the merger agreement, Horizon PCS stockholders will receive 0.7725 iPCS shares for each share of Horizon PCS common stock they hold, subject to adjustment. After closing, iPCS stockholders will own approximately 57.5% of the combined company's shares and Horizon PCS stockholders will own approximately 42.5% of the shares. In addition to its existing $165 million 11 1/2% senior notes due 2012, iPCS will become the obligor of Horizon PCS' $125 million 11 3/8% senior notes due 2012, such that, on a pro forma basis, the combined company will have a total of $290 million in senior notes. The transaction is expected to close during the summer of 2005. The transaction is subject to customary regulatory review, approval by Sprint, approval of the stockholders of both iPCS and Horizon PCS, and other customary closing conditions. The combined company's headquarters will be in Schaumburg, Illinois. Mr. Yager said, "The merger will create the second largest wireless Affiliate of Sprint in terms of covered POPs and third largest in terms of subscribers and will serve to improve the company's profile with Sprint today and in the future. We believe that the combined company will have one of the strongest balance sheets among the Sprint Affiliates and a substantial cash position. The combined company's relatively low market penetration of 3.9% suggests higher growth opportunities in the near-term relative to our industry peers. We look forward to consummating this merger and continuing to grow the combined company."
Mr. William McKell, president and chief executive officer of Horizon PCS, added, "Several factors make this a compelling transaction for creating shareholder value. First, the combined company will have a market capitalization of approximately $500 million resulting in better access to the capital markets which should provide increased liquidity for stockholders of both companies. Second, by combining two companies of relatively equal size and similar business operations, the new company will be able to realize synergies in a number of operating and administrative areas. Third, the combined company will benefit operationally and financially because of Horizon PCS' newly signed price simplification agreement with Sprint PCS. Finally, I would like to thank the employees of Horizon PCS who have accomplished so much over the past year. Their hard work has positioned the company well for this merger, which is a great next step for the company and its stockholders."
About iPCS
iPCS is the wireless Affiliate of Sprint with the exclusive right to sell wireless mobility communications, network products and services under the Sprint brand in 40 markets in Illinois, Michigan, Iowa and eastern Nebraska with approximately 7.8 million residents. The territory includes key markets such as Grand Rapids, Michigan, Champaign-Urbana and Springfield, Illinois, and the Quad Cities of Illinois and Iowa. iPCS is headquartered in Schaumburg, Illinois.
About Horizon PCS, Inc.
Horizon PCS is a wireless Affiliate of Sprint with the exclusive right to sell wireless mobility communications network products and services under the Sprint brand to a total population of approximately 7.4 million in portions of eleven contiguous states. Its markets are located between Sprint's Chicago, New York and Knoxville markets and connect or are adjacent to twelve major Sprint markets. As a wireless Affiliate of Sprint, Horizon markets wireless mobile communications network products and services under the Sprint and Sprint PCS brand names. Horizon PCS is headquartered in Chillicothe, Ohio.
About Sprint
Sprint offers an extensive range of innovative communication products and solutions, including global IP, wireless, local and multiproduct bundles. A Fortune 100 company with more than $27 billion in annual revenues in 2004, Sprint is widely recognized for developing, engineering and deploying state-of-the-art network technologies, including the United States' first nationwide all-digital, fiber-optic network; an award-winning Tier 1 Internet backbone; and one of the largest 100-percent digital, nationwide wireless networks in the United States.