AT&T announced a bid to acquire Leap Wireless for $15 per share in cash — a deal that values the San Diego-based carrier at about $1.2 billion.
Leap currently operates a 3G CDMA network, as well as a 4G LTE network covering 21 million people across 35 states. The company serves about 5 million prepaid mobile users under the Cricket brand. It currently ranks as the fifth largest mobile operator in the U.S.
Some operating stats for Leap Wireless:
- Over 9,500 company-owned stores, dealers, national retailers
- Cricket’s Muve Music service has more than 1.4 customers
- 71% of handsets sold in 1Q13 were smartphones
- $43.72 ARPU
- 3G average download speeds of ~600 kbps
- 4G average download speeds of ~2.5 Mbps
The deal would include all of Leap’s stock and wireless properties, including licenses, network assets, retail stores and approximately 5 million subscribers. As of April 15, 2013, Leap had $2.8 billion of net debt. Leap shareholders will also receive a contingent right entitling them to the net proceeds received on the sale of Leap’s 700 Mhz “A Block” spectrum in Chicago, which Leap purchased for $204 million in August 2012.
AT&T said its bid is driven by Leap’s spectrum in the PCS and AWS bands, which covers 137 million people and is largely complementary to AT&T’s existing spectrum licenses. AT&T would add Leap’s unutilized spectrum – which covers 41 million people – to its 4G LTE network, providing additional capacity and enhanced network performance for customers’ growing mobile Internet usage.
AT&T also said it would retain the Cricket brand name, provide Cricket customers with access to the AT&T 4G LTE mobile network, utilize Cricket’s distribution channels, and expand Cricket’s presence to additional U.S. cities.
The deal requires approval by the FCC and the the Department of Justice. AT&T expects the transaction to close in six to nine months.
- Leap Wireless was founded in 1998 as a spin-off from Qualcomm.
- In 2007, MetroPCS offered to acquire Leap Wireless but the deal ultimately was called off.
