In an interesting M&A move on the wireless front, Verizon made a deal yesterday to purchase Tracfone. The purchase price is $6.25B, half in cash and half in Verizon stock, with another $650M on the table if performance targets are met.
Tracfone is the pre-paid and value mobile operator that America Movil operates in the USA, and Verizon is hoping to boost its presence on that end of the market. Tracfone has more than 21M subscribers across its suite of brands, of which 13M are already served by Verizon’s network via a wholesale agreement. That will make the integration relatively easy.
The deal is expected to close in 2021. When it does, Tracfone’s 850 employees will join Verizon. Verizon expects to derive significant synergies from the deal, while not incurring signficant capital expenditures.
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Categories: Mergers and Acquisitions · Wireless
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