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Oct. 21, 2009

Sprint Nextel and iPCS say they have finally settled their differences, after many weeks of negotiations back and forth with their lawyers.

Sprint Nextel said late yesterday that it will acquire iPCS for $426.s million in cash.

iPCS is a Sprint affiliate that has sued it repeatedly over the terms of its contract with its parent operator.

For its part, iPCS has argued repeatedly that Sprint violated the terms of its contract by offering competing services in iPCS' same markets.

Sprint has always strongly denied these allegations from the beginning.

The affiliate has sued Sprint over its deal with Clearwire and its recent acquisition of Virgin Mobile USA.

Additionally, an appeals court upheld a previous ruling that Sprint had to stop offering Nextel-branded services in iPCS' territory, forcing Sprint to divest itself of those assets.

iPCS CEO Timothy Yager said he was "very pleased to have reached this agreement with Sprint Nextel and looked forward to working with the new Sprint Nextel team to ensure a smooth completion of the transition in the coming months."

Approximately 9.6 percent of iPCS shareholders have already agreed to the acquisition, which is expected to close either late in the fourth quarter of this year or in next January.

The deal also puts a stop to ongoing litigation between the two companies and allows Sprint to hold onto the iDEN assets it previously planned to divest as part of a settlement deal with iPCS.

IPCS resells Sprint services in 81 markets throughout Illinois, Michigan, Pennsylvania, Indiana, Iowa, Ohio and Tennessee.

The deal will net Sprint more than 700,000 new wireless customers, 270,000 wholesale customers and extends the company's direct service territory to an additional 12.6 million people.

Sprint CEO Dan Hesse promised iPCS' current customers will see a seamless transition throughout the acquisition.

iPCS's services are sold under the Sprint brand name and in Sprint-branded stores.

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Source: Sprint Nextel.