US operator Sprint Nextel has announced its intention to buy affiliate iPCS in cash for US$831 million. Sprint will pay US$24 per share for all of iPCS’ stock, a 34 percent premium on the company’s closing stock price last Friday. The deal will see Sprint take on US$405 million of iPCS’ net debt. In a statement, Sprint noted it “expects to achieve approximately US$30 million of synergies annually in the transaction and expects the transaction to be free cash flow accretive to Sprint in 2010.” Closure is expected in the fourth quarter of 2009 or early 2010.

Importantly, the deal sees both parties end a recent acrimonious relationship. “As part of the agreement, Sprint Nextel and iPCS will seek an immediate stay of all pending litigation between the parties with a final resolution to become effective upon closing of the acquisition.” iPCS had attempted to block Sprint’s planned US$483 million acquisition of Virgin Mobile USA. iPCS’ services are sold under the Sprint brand name and in Sprint-branded stores. More than 700,000 iPCS wireless users and 270,000 wholesale customers will become Sprint customers.