SC14D9C 1 a09-31811_2sc14d9c.htm SC 14D9

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

SCHEDULE 14D-9

 

Solicitation/Recommendation Statement under Section 14(d)(4) of the
Securities Exchange Act of 1934

 

iPCS, Inc.

(Name of Subject Company)

 

iPCS, Inc.

(Name of Person(s) Filing Statement)

 

Common Stock, par value $0.01 per share

(Title of Class of Securities)

 


 

44980Y305

(CUSIP Number of Class of Securities)

 


 

Brian J. O’Neil

Senior Vice President, General Counsel and Secretary

1901 North Roselle Road
Schaumburg, Illinois 60195

(847) 885-2833

(Name, address and telephone number of person
authorized to receive notices and communications on
behalf of the person(s) filing statement)

 


 

With copies to:

 

Paul W. Theiss, Esq.

William R. Kucera, Esq.

Bruce F. Perce, Esq.

Mayer Brown LLP

71 South Wacker Drive

Chicago, Illinois 60606

(312) 782-0600

 

x                  Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

 

 

 



 

This Schedule 14D-9 filing consists of the following items related to the proposed acquisition of iPCS, Inc. by Sprint Nextel Corporation:

 

1.                                       Joint Press Release of iPCS, Inc. and Sprint Nextel Corporation, dated October 19, 2009

 

2.                                       Electronic Mail Correspondence from Timothy M. Yager, President and Chief Executive Officer of iPCS, Inc., to employees of iPCS, Inc., dated October 19, 2009

 



 

1.             Joint Press Release of iPCS, Inc. and Sprint Nextel Corporation, dated October 19, 2009

 

GRAPHIC

 

Sprint Nextel Media Contact:

Scott Sloat, 240-855-0164

Scott.sloat@sprint.com

 

Sprint Nextel Investor Relations Contact:

Yijing Brentano, 800-259-3755

Investor.relations@sprint.com

 

iPCS Public Relations Contact:

Judith Wilkinson / Jamie Moser, 212-355-4449

Joele Frank, Wilkinson Brimmer Katcher

 

iPCS Investor Relations Contact:

Nathan Elwell, FD, 312-553-6706

nathan.elwell@fd.com

 

SPRINT NEXTEL TO ACQUIRE WIRELESS AFFILIATE
iPCS, INC.

 

·                  More than 700,000 PCS Wireless Users and 270,000 Wholesale Customers to Become Sprint Direct Subscribers

·                  Extends Company’s Direct Service Territory to an Additional 12.6 Million People

·                  Sprint Ends Plan to Divest iDEN Network Assets in Certain Midwestern States Pending Transaction Close

 

OVERLAND PARK, Kan. and SCHAUMBURG, Ill., – Oct. 19, 2009 – Sprint Nextel Corp. (NYSE: S) and iPCS, Inc. (NASDAQ: IPCS) today announced an agreement for Sprint Nextel to acquire iPCS for approximately $831 million, including the assumption of $405 million of net debt. This transaction value represents 6.4x projected 2010 Adjusted Earnings Before Income, Taxes, and Depreciation (“Adjusted EBITDA”*).  Sprint expects to achieve approximately $30 million of synergies annually in the transaction and expects the transaction to be free cash flow accretive to Sprint in 2010.

 

Under the terms of the agreement, Sprint Nextel will commence a cash tender offer to acquire all of iPCS’ outstanding common shares for $24.00 per share.  This price per share represents a 34 percent premium to iPCS’ closing stock price as of October 16, 2009.  The agreement also requires a minimum of a majority of the shares outstanding (on a fully-diluted basis) to be tendered in the offer.  Following completion of the tender offer, any remaining shares of iPCS will be acquired in a cash merger at the same price per share.  Shareholders with approximately 9.5 percent of the outstanding common shares of iPCS have already agreed to tender

 



 

their shares pursuant to the tender offer and to vote their shares in favor of the merger.

 

The acquisition is subject to customary regulatory approvals and other customary closing conditions, and is expected to be completed either late in the fourth quarter of 2009 or early 2010.   As part of the agreement, Sprint Nextel and iPCS will seek an immediate stay of all pending litigation between the parties with a final resolution to become effective upon closing of the acquisition.

 

As a result, Sprint will no longer be required to divest its iDEN network in certain iPCS territories and will terminate its previously announced divestiture process pending closing of the transaction.

 

iPCS’s services are sold under the Sprint brand name and in Sprint-branded stores. Because of the nearly seamless marketing and sales relationship between Sprint and iPCS, customers should not experience any change in their service as a result of this transaction.

 

“Acquiring iPCS brings added value to Sprint by expanding our direct customer base, growing our direct coverage area and simplifying our business operations,” said Dan Hesse, CEO of Sprint Nextel.  “Customers in iPCS territory will see a seamless transition and continue to enjoy a superb customer experience.”

 

“We are very pleased to have reached this agreement with Sprint Nextel. Given the increasingly competitive landscape, we believe this is an opportune time to provide our shareholders with a liquidity event at a very attractive price.  iPCS shareholders will receive a significant and immediate premium for their shares and our customers will continue to receive the same excellent service from the same dedicated people who provide that service today,” said Timothy M. Yager, president and CEO of iPCS.  “We look forward to working with the Sprint Nextel team to ensure a smooth completion of the transaction and transition in the coming months.”

 


*Financial Measures

Certain financial measures included in this release have been generated using adjustments to amounts determined under generally accepted accounting principles (non-GAAP). The non-GAAP financial measures reflect industry conventions, or standard measures of liquidity, profitability or performance commonly used by the investment community for comparability purposes. The financial measures used in this release include the following:

 

Adjusted EBITDA is defined as operating income plus depreciation, amortization and special items. We believe that Adjusted EBITDA provides useful information to investors because it is an indicator of the strength and performance of ongoing business operations. While depreciation and amortization are considered operating costs under generally accepted accounting principles, these expenses primarily represent non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods.

 

Net Debt is debt, including current maturities, less cash and equivalents and current marketable securities.

 



 

ADVISORS

 

Sprint’s financial advisor for the transaction was Citigroup Global Markets Inc. and its principal legal advisor was King & Spalding LLP.  iPCS’s financial advisors were UBS Investment Bank and Morgan Stanley & Co. Incorporated and its principal legal advisor was Mayer Brown LLP.

 

NOTICE TO INVESTORS

 

The planned tender offer described in this release has not yet commenced. The description contained in this release is not an offer to buy or the solicitation of an offer to sell securities. At the time the planned tender offer is commenced, Sprint Nextel will file a tender offer statement on Schedule TO with the Securities and Exchange Commission (the “SEC”), and iPCS will file a solicitation/recommendation statement on Schedule 14D-9 with respect to the planned tender offer. The tender offer statement (including an offer to purchase, a related letter of transmittal and other tender offer documents) and the solicitation/recommendation statement will contain important information that should be read carefully before making any decision to tender securities in the planned tender offer. Those materials will be made available to iPCS’s stockholders at no expense to them. In addition, all of those materials (and all other tender offer documents filed with the SEC) will be made available at no charge on the SEC’s website at www.sec.gov.

 

SAFE HARBOR

 

This press release includes forward-looking statements regarding the proposed acquisition and related transactions that are not historical or current facts and deal with potential future circumstances and developments, in particular, information regarding the acquisition of iPCS. Forward-looking statements are qualified by the inherent risk and uncertainties surrounding future expectations generally and may materially differ from actual future experience. Risks and uncertainties that could affect forward-looking statements include: the failure to realize synergies as a result of operational efficiencies, unexpected costs or liabilities, the result of the review of the proposed transaction by various regulatory agencies and any conditions imposed in connection with the consummation of the transaction, satisfaction of various other conditions to the closing of the transaction contemplated by the transaction agreement and the risks that are described from time to time in Sprint’s and iPCS’s respective reports filed with the Securities and Exchange Commission (SEC), including the annual report on Form 10-K for the year ended December 31, 2008 and quarterly report on Form 10-Q for the quarters ended March 31, 2009 and June 30, 2009 of each of Sprint and iPCs. This press release speaks only as of its date, and Sprint and iPCS disclaim any duty to update the information herein.

 

ABOUT iPCS, Inc.

 

iPCS, through its operating subsidiaries, is a Sprint PCS Affiliate of Sprint Nextel Corporation with the exclusive right to sell wireless mobility communications network products and services under the Sprint brand in 81 markets including markets in Illinois, Michigan, Pennsylvania, Indiana, Iowa, Ohio and Tennessee. The territory includes key markets such as Grand Rapids (MI), Fort Wayne (IN), the Tri-Cities region of Tennessee (Johnson City, Kingsport and Bristol), Scranton (PA), Saginaw-Bay City (MI), Central Illinois (Peoria, Springfield, Decatur, and Champaign) and the Quad Cities region of Illinois and Iowa (Bettendorf and Davenport, IA, and Moline and Rock Island, IL). As of June 30, 2009, iPCS’s licensed territory had a total population of approximately 15.1 million residents, of which its wireless network

 



 

covered approximately 12.6 million residents, and iPCS had approximately 710,200 subscribers. iPCS is headquartered in Schaumburg, Illinois. For more information, please visit iPCS’s website at www.ipcswirelessinc.com.

 

ABOUT SPRINT NEXTEL

 

Sprint Nextel offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two wireless networks serving almost 49 million customers at the end of the second quarter of 2009; industry-leading mobile data services; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. The company’s customer-focused strategy has led to improved first call resolution and customer care satisfaction scores. For more information, visit www.sprint.com.

 

###

 



 

2.                                      Electronic Mail Correspondence from Timothy M. Yager, President and Chief Executive Officer of iPCS, Inc., to employees of iPCS, Inc., dated October 19, 2009

 

From: Yager, Tim

Sent: Monday, October 19, 2009 7:15 AM

To: ALL Associates

Cc: Yager, Tim; O’Neil, Brian

Subject: iPCS - Sprint Announcement

 

Fellow Associates:

 

Today iPCS and Sprint Nextel announced that our two companies have entered into an agreement under which Sprint Nextel will acquire iPCS. Along with our Board of Directors, we believe that this transaction presents important opportunities for our Company and creates significant and immediate value for our shareholders.

 

As a Sprint affiliate since our inception in 1999, we are proud of the Sprint brand and the Sprint products and services we provide. We not only helped Sprint build one of the nation’s most reliable networks, but also successfully brought the extensive suite of Sprint offerings to our territories over the past 10 years. As an associate, you should be very proud of our Company’s success and the value that we have worked together to create.

 

We are moving expeditiously to close the transaction and expect it will be completed either late in the fourth quarter of 2009 or early in 2010, subject to successful completion of Sprint Nextel’s tender offer and customary regulatory approvals. We expect to achieve a seamless transition and look forward to working with Sprint Nextel’s management team to integrate our companies. We also expect that after closing, iPCS will continue to operate as a subsidiary of Sprint Nextel. Until the transaction closes it will remain “business as usual” at iPCS and we all must remain focused on executing against our business plan.

 

Today’s announcement is likely to create media interest and it is crucial that the Company speak with one voice.

 



 

In the event that you are contacted by members of the media or financial community regarding this transaction, please refer all inquiries to Steb Chandor at 847-885-2833.

 

I realize that you will have many questions, and we will do our very best to keep you informed in a timely manner. In anticipation of some of your questions, we will provide a FAQ about the transaction, which will be posted on Sharepoint in the coming days. If you have any immediate questions, please feel free to speak with your leader.

 

I’d like to thank you for your past and continuing commitment to iPCS. I am excited about the opportunities in front of us and am confident that, together with Sprint Nextel, we have a bright future ahead.

 

Sincerely,

 

Tim Yager

 

Additional Information

 

The tender offer described herein has not yet commenced, and this release is neither an offer to purchase nor a solicitation of an offer to sell securities. At the time the tender offer is commenced, Sprint will cause a new wholly owned subsidiary to file a tender offer statement on Schedule TO with the Securities and Exchange Commission (the “SEC”). Investors and the iPCS’s stockholders are strongly advised to read the tender offer statement (including the offer to purchase, letter of transmittal and related tender offer documents) and the related Schedule 14D-9 Solicitation/Recommendation Statement that will be filed by the iPCS with the SEC, because they will contain important information. These documents will be available at no charge on the SEC’s website at www.sec.gov. In addition, a copy of the Schedule 14D-9 Solicitation/Recommendation Statement will be made available to all shareholders of the iPCS free of charge by directing a request to investor@ipcswirelessinc.com.

 

Forward-Looking Statements

 

Matters discussed herein may constitute forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Statements that are not historical facts, including statements preceded by, followed by, or that include the words “future”; “expect”; “anticipate”; “potential”; “believe”; or similar statements are forward-looking statements. Risks and uncertainties include uncertainties as to the timing of the tender offer and the merger; uncertainties as to how many shares of the iPCS’s common stock will be tendered into the tender offer; the risk that competing offers will be made; the possibility that various closing conditions for the transaction may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transaction; the effects of disruption from the transaction making it more difficult to maintain relationships with employees, licensees, other business partners or governmental entities; as well as risks detailed from time to time in iPCS’s and Sprint’s public disclosure filings with the SEC, including their respective Annual Reports on Form 10-K for the fiscal year ended December 31, 2008, subsequent quarterly filings on Form 10-Q and the Schedule TO Tender Offer Statement and Schedule 14D-9 Solicitation/Recommendation Statement to be filed in connection with the tender offer. iPCS disclaims any intent or obligation to update any forward-looking statements as a result of developments occurring after the period covered by this report or otherwise. Copies of iPCS’s and Sprint’s SEC filings are available at the SEC’s website at www.sec.gov.