Sprint to Acquire Affiliate iPCS, Ending Legal Disputes

Sprint Nextel agreed to acquire wireless provider iPCS Inc. -- its last major independent affiliate -- for $426 million, ending a legal battle between the companies. Sprint, the third-largest U.S. carrier by subscribers, has been acquiring its wireless affiliates over the past several years after its 2005 buy of Nextel caused headaches for the combined company, including outcry from partners that saw their competitive position compromised. iPCS provides cellular service under the Sprint brand to more than 700,000 customers in seven states. It has sued Sprint several times to prevent the carrier from competing with iPCS in its territory after the Nextel deal. Sprint announced plans in June to sell network assets in several Midwestern states to comply with an Illinois court ruling to divest Nextel assets as part of the iPCS spat. That plan is now off in light of the deal. Under the agreement, expected to close late this year or early next year, Sprint will acquire iPCS for $24 a share, a 34% premium to Friday's closing price on the Nasdaq Stock Market. Sprint will also assume $405 million in debt in the deal, which also eases the way for Sprint to sell both Nextel services and WiMax broadband services, which iPCS was also suing to block, in those territories.