July 30, 2007
Verizon Wireless To Acquire Rural Cellular Corporation,
Expand The Nation's Most Reliable Wireless Network
Acquisition Will Expand Coverage In Rural Markets In 15 States
Basking Ridge, NJ -- In a move to expand its wireless service coverage in
rural markets, Verizon Wireless, a joint venture of Verizon Communications
(NYSE:VZ) and Vodafone (NYSE and LSE: VOD), announced today that it has
entered into an agreement to acquire Rural Cellular Corporation
(NASDAQ:RCCC), for approximately $2.67 billion in cash and assumed debt.
The acquisition will further enhance Verizon Wireless¹ network coverage in
markets adjacent to its existing service areas. The combination will
increase Verizon Wireless coverage by 4.7 million licensed POPs
(population), and increase its customer base by more than 700,000.
"Verizon Wireless continually looks for opportunities to enhance our
customers' wireless experience," said Lowell McAdam, president and CEO of
Verizon Wireless. "The addition of Rural Cellular¹s markets will enable us
to expand our services into areas where previously we had little or no
presence, and will give Rural Cellular¹s Unicel customers access to the
nation¹s most reliable network and a broader range of voice and data
services."
Richard Ekstrand, president and CEO of Rural Cellular Corporation, said,
"Since the founding of Rural Cellular Corporation in 1990, our mission has
been to provide wireless service to rural areas across the country where
tourism, agriculture and small businesses are prevalent. Our employees are
deservedly proud of the tremendous growth and strong financial performance
we have achieved, while we continued to focus on providing innovative
solutions through wireless technologies and maximizing customer
satisfaction.
"Today, as the wireless industry continues to evolve, our Board of Directors
has concluded that it is in the company's best interest to enter into a sale
transaction with Verizon Wireless. As the nation's leading wireless
provider, Verizon Wireless has the resources and scale to provide a wide
range of outstanding products and services to our customers, while also
offering new opportunities for many of our employees."
Rural Cellular's network served 716,000 customers as of March 31, 2007,
spread across five regional territories. Its networks are located in the
states of Maine, Vermont, New Hampshire, New York, Massachusetts, Alabama,
Mississippi, Minnesota, North Dakota, South Dakota, Wisconsin, Kansas,
Idaho, Washington, and Oregon.
Rural Cellular utilizes both CDMA and GSM technology separately across its
five regional markets. Verizon Wireless plans to deploy CDMA service in
Rural Cellular's existing GSM markets and convert the GSM customers to CDMA
service. Verizon Wireless, however, anticipates maintaining Rural
Cellular¹s existing GSM networks to continue serving the roaming needs of
other GSM carriers¹ customers.
Verizon Wireless expects to realize more than $1 billion in synergies in
reduced roaming and operations expenses. The addition of the new markets
will also offer the company additional upside growth opportunities.
Deal Terms
Under terms of the agreement, approved by the boards of both companies,
holders of Rural Cellular's common stock will receive $45 per share in cash
for a total equity price of $757 million on a fully diluted basis.
Including net debt as of the first quarter of 2007, the total transaction
value is approximately $2.67 billion. The $45 price per share represents a
16 percent premium to the average closing price over the last 10 trading
days and a 41 percent premium to the last closing price of $31.88 on Friday,
July 27, 2007.
The acquisition, which is subject to governmental and regulatory approval
and approval of Rural Cellular's shareholders, is expected to close in the
first half of 2008.
About Verizon Wireless
Verizon Wireless operates the nation's most reliable wireless voice and data
network, serving 62.1 million customers. The largest U.S. wireless company
and largest wireless data provider, based on revenues, Verizon Wireless is
headquartered in Basking Ridge, N.J., with 67,000 employees nationwide. The
company is a joint venture of Verizon Communications (NYSE: VZ) and Vodafone
(NYSE and LSE: VOD). Find more information on the Web at
www.verizonwireless.com
About Rural Cellular Corporation
RCC, based in Alexandria, Minnesota, provides wireless communication
services under the Unicel brand to Central, Midwest, Northeast, South and
Northwest territories located in 15 states. For additional information
about Rural Cellular Corporation, please refer to its web site at
www.unicel.com.