Investcorp to Acquire IWO; IWO to Assume Management of Local Sprint PCS Service

Global investment group Investcorp (New York) has entered into a definitive agreement with Independent Wireless One Corp. (IWO). Under the agreement, Investcorp, certain international co-investors and IWO management will acquire 79% of IWO for approximately $135 million in total equity. The remaining 21% of the company will be owned by the IWO founders, including a number of prominent independent regional telephone companies located in the Northeast region of the United States.

Affiliation Agreement
In other news, IWO will assume management of local Sprint PCS service and operations in several Northeast markets as part of its existing network affiliation agreement with the carrier. The agreement makes Albany, NY-based IWO one of its largest affiliates, allowing it to provide PCS communications products and services under the Sprint PCS brand name on an exclusive basis throughout IWO's territory.

IWO's markets cover a population of 6.3 million people in a contiguous territory extending in New York State from suburban New York City to the Canadian border and from Syracuse east to include all of Vermont, New Hampshire (excluding Nashua) and portions of western Massachusetts and northeastern Pennsylvania.

Affiliate Advantages
As a partner, IWO will operate and market its network as Sprint PCS service, using the same network hardware, phones, marketing campaigns, and pricing structures. Through this agreement, IWO will offer the full suite of wireless voice, data and Internet services and products.

IWO will benefit from the carrier's relationships with key infrastructure and phone manufacturers, and national retail distribution partners. In addition, IWO will be able to use the Sprint PCS' network and customer care support assets, including 24-hour network management and monitoring via the national network operations control center; billing, voicemail, and prepaid platforms; customer care calling centers and enhanced customer care features.

With the $135 million equity investment by Investcorp and its co-investors, and approximately $340 million in new credit facilities, IWO will acquire Sprint PCS's existing wireless communications infrastructure and customer base within the defined territory and fully finance customer growth and the future build out of a robust wireless network.

Edited by Ellen Jensen