MetroPCS Communications is planning to raise more than $400 million through an initial public offering just a few weeks after the Dallas-based wireless communications provider tapped the bank and high-yield markets. Its $1.6 billion term loan broke two weeks ago and is currently trading at 100.167-100.417, according to Markit.
According to Corporate Financing Week, a CIN sister publication, proceeds from the IPO will be used to fund expansion into new markets. Madison Dearborn Partners and TA Associates will not cash in their investment in the IPO. A person familiar with the matter said the buyout shops plan to ride the company's continued growth. The firms combined to invest $739 million each in MetroPCS in 2005 for a 14% stake. A host of other private equity firms, including Banc of America Equity Partners, own the rest.
In September, the company bought $1.4 billion of wireless spectrum in a federal auction, a move it's funding with proceeds from the sale of $1 billion in high-yield bonds and the term loan. The term loan, led by Bear Stearns, Merrill Lynch and Bank of America, was originally $1.4 billion and was upsized by $200 million because of heavy demand prior to its break into the secondary, according to a dealer (CIN, 11/6). Twenty-five basis points were also shaved off the term loan, which ended up pricing at LIBOR plus 2 1/2%.
The new licenses will give MetroPCS access to New York, Philadelphia, Boston and other metropolitan areas. The company is currently active in parts of California, Florida, Georgia, Michigan and Texas. The IPO, slated to come within a year, would value the company at more than $5 billion, according to one person.