AT&T; to Sell Paging Unit to Metrocall for $205 Million
AT&T; Corp. agreed Monday to sell its paging unit to Metrocall Inc. for $205 million in cash and preferred stock, as the nation’s largest telecommunications company continues to shed businesses that are not central to its growth plans.
The deal would allow Metrocall to expand its reach into next-generation services, acquire about 1.2 million subscribers and gain an exclusive five-year distribution agreement with AT&T.;
“This is a very attractive deal for Metrocall. They got these assets for a relatively low price. It fulfills a lot of Metrocall’s strategic needs,” said Suzanne Stein, a wireless and paging analyst with Goldman, Sachs & Co.
AT&T;'s Advanced Messaging Division is the 10th-largest paging company in the United States. It provides local, regional and national paging services, primarily in the Northwest, West, Central region and Southwest.
The unit began operations in 1982 as a subsidiary of the former McCaw Cellular. (AT&T; bought McCaw in 1994.)
Over the last year, AT&T; has sold several non-core businesses, including AT&T; Universal Card Services to Citicorp for $3.5 billion and AT&T; Solutions Customer Care to Cincinnati Bell for $625 million.
AT&T;, meanwhile, is expanding its data and local telephone services and last week agreed to buy cable TV giant Tele-Communications Inc. in a deal valued at $48 billion.
AT&T; said in November it was considering the sale of the paging unit. At that time, analysts said they believed the unit could fetch about $400 million to $450 million, about double the final selling price.
AT&T; was slow to sell the paging business since it lacked a national presence and was put up for sale at a time of weak merger and acquisition activity in the paging industry, analysts said.
AT&T; will still offer paging services to its customers on a resale basis but will not own its own paging assets.