Nine months in the making, Sprint Nextel Corp. announced the
acquisition of Virgin Mobile USA Inc. for $731 million deal on July 28. According to an SEC
filing, there was a competing bid from "Company X," which Deutsche Bank AG (NYSE:DB) said would be the company most interested in acquiring Virgin Mobile USA other than Sprint, based on its perceived financial strength, similar business model and past management dialogue with Virgin Mobile.
After asking Company X numerous times for terms on a trademark license agreement and a few other key details, Virgin's transaction committee decided their flaky nature made Sprint's offer more favorable. Although, Company X argued its offer was better, but you can read about that in the
"Background of the Merger" excerpt (which is 12 pages long) from the larger S-4 filing. Company X formally withdrew its offer on July 24.
After haggling with Sprint on valuation, many back-and-forth phone calls and voice-mails, in-person meetings at Sprint headquarters and in King & Spalding LLP's office, virtual data room, or VDR, gatherings and a dinner at Sprint CEO Dan Hesse's home, the deal came together.
Here are some bits and pieces from the talks, with mentions of who the corp dev people are:
The idea for potential investment opportunities by Sprint was floated on Nov. 4, when Keith Cowan, Sprint Nextel's president of strategic planning and corporate initiatives and acting president of CDMA, made a presentation to Sprint's board. A couple weeks later, Cowan called Daniel Schulman, Virgin's CEO to discuss ways to "establish a closer relationship."
On Dec. 10, Cowan, Christopher Rogers, Sprint's SVP of corporate development and spectrum, and Matt Madden, Sprint's then-director of corp dev, met with Schulman and David Messenger, Virgin Mobile's chief administration and corporate development officer, in New York at King & Spalding to discuss synergies from a possible combination.
On April 15, Schulman and Jean Manas, who was then the vice chairman of Deutsche Bank's M&A group, met with Hesse and Cowan at Sprint's headquarters in Overland Park, Kan., and presented an acquisition proposal. The filing was sure to note Manas' travels from Deutsche to being an independent contractor to Colonnade Securities LLC and then founding his own firm, Foros Advisors LLC.
On May 6, Messenger and Virgin CFO John Feehan and representatives of Deutsche Bank talked with Rodger Smith, Sprint's director of corporate development, Tom Lee, another corp dev director, Eric Lew, Sprint's corp dev manager, Cary Baker, Sprint's director of financial operations for Boost, and reps of Wells Fargo regarding estimates of cost synergies that could be realized in a business combination.
The filing of course goes on to discuss risk factors among other points. Click below to read on. -
Baz HiralalGo to the Sprint-Virgin Mobile SEC filingSee the Background of the Merger excerpt
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