YOU ARE AT:Archived ArticlesDOBSON COMMUNICATIONS TO BUY SYGNET WIRELESS

DOBSON COMMUNICATIONS TO BUY SYGNET WIRELESS

Dobson Communications Corp. signed an agreement to acquire Sygnet Wireless Inc., which has been looking for a buyer since April.

The agreement will expand Dobson’s wireless footprint to include Ohio, Pennsylvania and New York. Dobson’s wireless networks already cover Oklahoma, Texas, Kansas, Maryland, Missouri, California and Arizona.

Terms of the agreement call for Sygnet shareholders to receive $337.5 million, or $34.51 per share, on a fully diluted basis. Dobson also will assume all of Sygnet’s long-term debt, which totaled about $310 million on June 30, said the company.

The agreement is subject to shareholder and regulatory approvals and is expected to close during the fourth quarter.

Sygnet in April retained Lehman Brothers Inc. as its financial adviser to explore its strategic alternatives, including the sale of the company. The company’s board of directors cited the industry’s rapid consolidation as its reason for looking for a buyer.

For its part, Dobson during the last year has been adding wireless properties of increasing importance to its portfolio.

Together with the Gila River Indian Community, Dobson last year closed a transaction to acquire the Arizona 5 Rural Service Area cellular market from U S West Inc.

Early this year, the company closed its acquisition of Texas RSA 16, which added 4,000 subscribers to its customer base. In April, Dobson completed the acquisition of California RSA 4, giving it 16,500 new subscribers.

The company this year also acquired a 70-percent interest in the company that owns the Santa Cruz Metropolitan Statistical Area, which is adjacent to California RSA 4.

Once the Sygnet acquisition is completed, the combined company will cover a population of 5.1 million and serve 258,000 subscribers.

“We continually identify and evaluate candidates for potential acquisitions with our strategy of acquiring some of the premier cellular markets in the nation,” said Everett Dobson, chairman and chief executive officer of the company. “We then operate markets with a focus on establishing and maintaining a strong and visible local presence.”

Dobson’s other wireless activities include an operating agreement with AT&T Wireless Services Inc., which calls for Dobson to install Time Division Multiple Access technology on most of its wireless networks and includes a five-year roaming agreement.

To finance its acquisition activity and digital upgrades, Dobson this spring closed on two bank facilities for $450 million. The company raised an additional $175 million in January by issuing senior exchangeable preferred stock in a private placement.

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