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Newly merged telecom giant Sprint Nextel Corp. agreed Tuesday to buy two affiliates, IWO Holdings Inc. and Gulf Coast Wireless LP, for $714 million in cash and assumed debt, which should resolve the legal problems with one of the companies. Reston, Va.-based Sprint Nextel, formed this year by the $35 billion merger of Sprint Corp. and Nextel Communications Inc., said in a statement it would pay $287.5 million including assumed debt for Baton Rouge, La.-based Gulf Coast. The price is equivalent to 9.2 times Ebitda for the year ended June 30. The statement said Sprint Nextel and Gulf Coast said they will ask for an immediate stay of litigation pending in U.S. District Court in Middle District of Louisiana. Sprint is facing litigation with several affiliates, though some of these cases have been resolved. Sprint Nextel is also paying $427 million, including the assumption of about $208 million of debt, for Albany, N.Y.-based IWO, which reflects a multiple to Ebitda of 10.8 times. The buyer is offering $42.50 a share for the company, and the holders of one-third of the shares have accepted the offer. Citigroup Global Markets Inc. and the law firm King & Spalding advised Sprint Nextel on both deals. Gulf Coast’s advisers were Legg Mason Wood Walker Inc. and the law firm Arnall Golden Gregory. Merrill Lynch & Co. is the financial adviser for IWO, whose legal advisers are Paul, Weiss, Rifkind, Wharton & Garrison. Copyright �2005 TDD, LLC. All rights reserved.

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