News | April 5, 2000

RCC Completes Acquisition of Triton Cellular Partners

Rural Cellular Corp. (RCC; Alexandria, MN) that its subsidiary, RCC Holdings Inc., has completed its $1.256 billion acquisition of the licenses, operations, and related assets of Triton Cellular Partners, L.P. All of the properties are 100% owned, and the 20 rural service areas (RSA) are contiguous within their respective geographic regions. In addition, the acquisition includes unbuilt PCS licenses in four basic trading areas in Oregon.

The cellular regions acquired by RCC Holdings include the following RSAs:

South Region

  • Alabama (AL-3, AL-4, AL-5, AL-7)
  • Northern Mississippi (MS-1, MS-3, MS-4)
  • Western Kansas (KS-1, KS-2, KS-6, KS-7, KS-11, KS-12, KS-13)

    Northwest Region

  • Oregon (OR-3, OR-4, OR-6)
  • Washington (WA-2, WA-3, WA-8)

    The new regions will be managed through their operational headquarters located in Enterprise, AL, and Bend, OR, respectively.

    In conjunction with the acquisition, RCC has entered into a new $1.2 billion credit facility arranged by TD Securities (USA) Inc., which replaces the previously existing $300 million credit facility. In addition, RCC has issued 110,000 shares of redeemable voting convertible preferred stock for consideration of $110 million. The purchasers included Madison Dearborn Capital Partners III, L.P., Madison Dearborn Special Equity III, L.P., Special Advisors Fund I, LLC (Madison Dearborn) and including Boston Ventures Limited Partnership V (Boston Ventures) and Toronto Dominion Investments Inc. (TD Investments). Madison Dearborn, Boston Ventures, and TD Investments have significant collective experience investing in wireless communication companies.

    To comply with the FCC's rules regarding cross-ownership of cellular licensees within a given market, the company also issued shares of Class T convertible preferred stock to Telephone & Data Systems Inc. (TDS) in exchange for 43,000 shares of Class A Common Stock and 105,940 shares of Class B Common Stock owned by TDS. An affiliate of TDS operates the competing cellular licensee in two of the RSAs acquired by the company from Triton Cellular. TDS or the company can convert the Class T preferred stock to Class A or Class B Common Stock in the future if ownership by TDS of the Common Stock would then be permissible under FCC rules. Under current FCC rules, TDS is not allowed to own more than 5% of the outstanding Class A or Class B Common Stock.

    Edited by Ellen Jensen