Private Equity News & Analysis

Goldman Sachs, TPG to exit Alltel in $28.1bn sale

Verizon Wireless has agreed to purchase the telecom company less than a year after it was taken private for $27.5bn.

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Private equity firms Texas Pacific Group and Goldman Sachs Capital Partners will turn a $1.3 billion (€834 million) profit on their 2007 investment in Alltel after agreeing to sell the company to Verizon Wireless.

TPG and GSCP will receive $5.9 billion in the sale which has a total value of $28.1 billion. The involved parties are aiming to close the deal by the end of the year pending regulatory approvals.

The two firms announced a take-private of Alltel for $71.50 per share in May last year, closing the deal in November. The transaction was valued at $27.5 billion, including $4.6 billion in equity.

A source told the Wall Street Journal at the time that the deal’s structure included a $4 billion equity cheque from GSCP and TPG, offset by more than $600 million in equity bridge loans from banks led by Citigroup. Financing was provided by Goldman Sachs, Citigroup, Barclays and RBS.

TPG and GSCP beat two rival consortiums to acquire Alltel, including The Blackstone Group and Providence Equity Partners, and The Carlyle Group and Kohlberg Kravis Roberts.

Citibank, Goldman Sachs and RBS advised TPG and GSCP on the transaction. Ropes & Gray acted as legal advisors to the sellers.