WAYNESBORO, Va.-NTELOS Inc. and Conestoga Enterprises Inc. reached a definitive merger deal that will create an integrated communications provider in the Mid-Atlantic region with 200,000 PCS subscribers and 175,000 local access telephone lines.
NTELOS will pay stockholders of Conestoga a total of $335 million, or approximately $40 per share in the form of cash and NTELOS stock. The acquirer also will assume about $73 million of Conestoga’s debt.
To finance the cash portion of the transaction, a tax-free reorganization accounted for as a purchase, NTELOS will issue up to $200 million in a new series of redeemable, convertible preferred stock to Welsh, Carson, Anderson & Stowe, an existing preferred shareholder. Other private equity holdings of New York-based Welsh, Carson include Centennial Communications Corp. and SpectraSite Holdings Inc.
NTELOS, headquartered in Waynesboro, Va., provides PCS, Internet access and local and long-distance telephone service to customers in Virginia, West Virginia, Kentucky, Tennessee and North Carolina. It owns several PCS licenses within the Conestoga service area.
Conestoga, based in Birdsboro, Pa., offers local and competitive local wireline telephone services in central Pennsylvania.
NTELOS was known until last December as CFW Communications because its headquarters are in the Clifton-Waynesboro section of Virginia. Earlier this year, it closed its acquisition of another Virginia carrier, R&B Telecom.
In a report issued during the first quarter, Baltimore-based Legg Mason Inc., which advised NTELOS on the Conestoga acquisition, estimated that 70 percent of NTELOS’ enterprise value is derived from cellular, PCS, paging and wireless tower operations.
