Acquisition of Metro PCS by Deutsche Telekom AG (T-Mobile US, Inc. ) On Oct 3, 2012 acquisition of MetroPCS Communications Inc’s 74% stake by T-Mobile US, Inc, a subsidiary of Deutsche Telekom AG by $29 Billion provides MetroPCS’ stockholders with an immediate $1. 5 billion aggregate cash payment as well as an approximate 26% ownership stake in the combined company. It allows all MetroPCS stockholders to participate in the expected significant equity upside of the combined company. Our valuation exercise leads to $3. 04 per share of MetroPCS whereas it has been acquired at S4. prior to the proposed reverse stock split which Justifies the premium paid projected cost synergies of $6-7 billion as net present value and annual run-rate cost synergies projected at $1. 2-1. 5 billion after an integration period. Value Addition for Deutsche Telekom AG (T-Mobile US, Inc. ) On May 1, 2013, Deutsche Telekom AG (T-Mobile US, Inc. ) completed the combination of T-Mobile USA, Inc. and MetroPCS Communications, Inc. , uniting two wireless innovators with one common vision; to bring wireless consumers exciting new choices while delivering an exceptional experience.
The Board of Directors of the combined company will have 11 members, including two directors of MetroPCS who will continue with the combined company. Tim H?¶ttges, currently Deputy Chief Executive Officer and Chief Financial Officer of Deutsche Telekom, will serve as Chairman of the Board. Union of T-Mobile and MetroPCS, a dynamic new player have been created in the wireless industry that has the right strategy and management team in place to compete successfully in today’s marketplace. A few facts about America’s Un-carrier: ??? 2012 combined entity results would have reflected $24. illion of revenue, $6. 4 billion of adjusted EBITDA, $3. 7 billion of capital expenditures (excluding spectrum purchases), and $2. 7 billion of free cash flow. ??? Approximately 43 million subscribers as of March 31 , 2013, two exceptionally strong brands, and 70,000 customer touch points. ??? A wider choice of outstanding wireless devices, including iPhone, offered through simple, affordable rate plans for unlimited talk, text and Web – with no restrictive annual service contracts required. ?? The combined company’s total POP coverage is 301 million, of which 283 million are covered by wned network. 228 million are currently served with 4G and 200 million are expected to be covered with 4G LTE by the end of 2013. ??? An enhanced spectrum position that will provide greater network coverage and deeper 4G LTE coverage in key markets across the country. Combining the two companies’ spectrum provides a path to at least 20+20 MHz of 4G LTE in approximately 90% of the top 25 metro areas in 2014 and beyond. Value Addition for Metro PCS and consolidation as the leading value carrier in the U.
S. wireless marketplace through its expanded scale, spectrum and financial resources. The combined ompany will directly benefit from its: 1) Strong financial profile: The combined company is expected to have BB S&P credit rating, which is two notches better than MetroPCS stand-alone and many peers ??? Target five-year (from 2012 to 2017) compounded annual growth rates in the range of 3% to 5% for revenues, 7% to 10% for EBITDA and 15% to 20% for free cash flow; ??? Projected cost synergies of $6-7 billion NPV, with an annual run-rate of $1. -1. 5 billion after an integration period. 2) Robust spectrum position: The combined company will have the network capacity to support the anticipated cceleration in customers’ mobile data demand and combined spectrum position in major metropolitan areas will be four times greater on average than MetroPCS on a stand-alone basis. ?? The combined company will have more AWS spectrum than any other carrier. AWS is emerging as one of the primary LTE bands in the United States. Complementary spectrum that allows for greater 4G LTE bandwidth, including at least 20×20 MHz in approximately 90% of top 25 metro areas by 2014+, which is expected to yield high levels of efficiency, capacity and throughput. 3) Seasoned executive leadership:
The combined company’s senior management team has over 1 50 years of combined telecommunications industry experience, and is committed to growth and cost leadership ??? John Legere, current President and Chief Executive Officer of T- Mobile, will serve as the President and CEO of the combined company and J. Braxton Carter, currently MetroPCS’ Chief Financial Officer, will serve as CFO of the combined company 4) Highly-qualified, diverse Board: The combined company’s board includes current and former executives of AT&T, Dell, Rockwell International Corporation and Madison Dearborn Partners, LLC.