Private equity firms acquire Alltel for $27.5B

Alltel announced a definitive merger agreement for acquisition by private equity firms TPG Capital and GS Capital Partners totaling $27.5 billion, the largest buyout in U.S. telecommunications industry history. Per terms of the deal, which ends months of speculation on the Little Rock, Arkansas-based wireless operator's future, TPG Capital and GSCP will acquire all outstanding Alltel common stock for $71.50 per share in cash. The merger was unanimously approved by Alltel's board of directors.

Completion of the merger, currently expected to close either in the fourth quarter of 2007 or the first quarter of 2008, is contingent upon the usual closing conditions, most notably approval by shareholders and regulators. Alltel said CEO Scott Ford will continue in his current role.

Alltel was considered a prime takeover target since spinning off its wireline operations in 2005--according to The New York Times, Texas Pacific and Goldman made their offer last week in an attempt to circumvent what was expected to be a formal auction. Although most analysts predicted Alltel would eventually end up the property of Verizon, a number of additional private equity consortiums were reportedly also in line to bid, including the Blackstone Group with Providence Equity Partners as well as the Carlyle Group with Kohlberg Kravis Roberts & Company.

While Alltel rarely receives the attention afforded its larger rivals, the operator has consistently remained at the forefront of mobile content innovation, in particular in its emphasis on the overall customer experience. Earlier this year, Alltel introduced Celltop, a widget-based user interface technology dedicated to simplifying content access and management, and just this month announced Day Pass, enabling subscribers to sample the mobile web via 24 hours of unlimited service. To my way of thinking, it's the only U.S. carrier that consistently focuses more on the consumer than on the content, and here's hoping the same spirit of innovation continues under the new ownership.

For more on the Alltel deal:
- read this release