US carrier AT&T announced on Friday that it will acquire prepaid wireless provider Leap Wireless and all of its licenses, network assets, retail stores and subscribers for $15 (£10) per share in cash.
The $1.19 billion-in-cash acquisition includes spectrum in the PCS and AWS bands. AT&T plans to bolster its 4G LTE deployment by utilising Leap's unused spectrum. Leap's 3G CDMA network - under Cricket Communications - caters to 96 million subscribers across 35 US states, but its 4G LTE network blankets only 21 million subscribers.
As for Leap's 3,400 employees, they will help kick off AT&T’s foray into prepaid. AT&T said the Leap acquisition would allow it to retain the Cricket brand name, provide Cricket customers with access to its 4G LTE mobile network, use Cricket’s distribution channels and expand in the US.
Leap had $2.8 billion in debt as of April 2013. Therefore, after factoring in the $15 per share in-cash agreement, the AT&T-Leap Wireless deal is valued at about $4 billion.
All of this is subject to a review by the Federal Communications Commission and the US Department of Justice, of course. The deal should close in six to nine months - if it doesn't go the way of AT&T's botched T-Mobile purchase.