AT&T Inc. said Tuesday it has agreed to a $780 million cash deal with Atlantic Tele-Network Inc. (ATNI) for the latter’s U.S. retail wireless operations. The deal nets the Dallas-based communications giant wireless spectrum that complements its current network, as well as 585,000 new subscribers.
The business, which operates under the Alltel brand, covers six states—Georgia, Idaho, Illinois, North Carolina, Ohio, and South Carolina—and generated $350 million of revenue through the first nine months of 2012. The transaction is expected to close in the second half of the year, pending approval from the Federal Communications Commission and the U.S. Department of Justice.
Two years ago, the Justice Department blocked AT&T’s proposed $39 billion takeover of rival T-Mobile on antitrust grounds. Since then, AT&T has turned to smaller acquisitions to build up its network of wireless spectrum to compete with Verizon Wireless, the top U.S. wireless carrier (AT&T is No. 2). Bloomberg reports that the deal with Atlantic Tele-Network comes on the heels of roughly two dozen spectrum deals for AT&T in 2012, including a $600 million purchase of NextWave Wireless Inc. that was announced in August.
For its part, ATNI said in its announcement of the deal that it would put the proceeds from the sale to use through possible acquisitions, debt reduction, and growing its existing businesses.
Sullivan & Cromwell is representing longtime client AT&T in connection with the purchase. As we reported in 2011, S&C served as the company’s deal counsel on the ill-fated T-Mobile takeover attempt. (The Am Law Daily previously reported on the crowded list of law firms serving as outside counsel on both sides of that proposed deal.) S&C’s relationship with AT&T goes back roughly 20 years, when the company was called SBC Communications, and has seen the firm advise the company on some of its largest transactions, including the $86 billion purchase of BellSouth in 2006.
The S&C team advising on Tuesday’s deal includes M&A partners Eric Krautheimer and Krishna Veeraraghavan, as well as M&A associates Nicholas Snow and Vanessa Pon. Tax partner Andrew Mason and executive compensation and benefits partner Matthew Friestedt are also advising, along with tax special counsel David Passey and executive compensation and benefits special counsel Henrik Patel. D. Wayne Watts serves as general counsel for AT&T.
(For S&C, the AT&T deal also comes on the heels of the firm’s representation of the Ontario Teachers’ Pension Plan on the purchase of SeaCube Container Leasing Ltd. in a $467 million deal announced late Friday. Skadden, Arps, Slate, Meagher & Flom advised SeaCube.)
Meanwhile, ATNI has enlisted the legal services of both Cleary Gottlieb Steen & Hamilton and Jenner & Block. Cleary’s team includes corporate partner William Groll, as well as corporate associates Joseph Lanzkron and Robert Manzanares. Other Cleary attorneys on the deal include partner David Gelfand, and associates Elaine Ewing and Ryan Davis, advising on antitrust matters; partner Arthur Kohn, and associates Helen Skinner and Liliane Diaba, advising on employee benefits aspects; partner James Duncan and associate Daniel Pilarski advising on tax matters; partner Len Jacoby and associate Megan Prunella advising on intellectual property matters; and counsel W. Richard Bidstrup advising on environmental matters.
Jenner’s team on the deal is led by partner Samuel Feder, who chairs the firm’s communications practice, along with litigation and communications partner John Flynn. Litigation associates Micah Cogen and David Didion are also working on the deal.
Leonard Slap, a former Edwards Angell Palmer & Dodge partner, is general counsel for ATNI.