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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 13, 1998
RURAL CELLULAR CORPORATION
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(Exact name of Registrant as Specified in its Charter)
MINNESOTA
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(State or other Jurisdiction of Incorporation)
0-27416 41-1693295
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(Commission File Number) (IRS Employer Identification No.)
3905 DAKOTA STREET S.W., ALEXANDRIA, MINNESOTA 56308
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (320) 762-2000
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Former Name or Former Address, if Changed Since Last Report
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Item 5. Other Events.
On February 13, 1998, the Registrant entered into an agreement to acquire the
net assets of Atlantic Cellular Corporation ("Atlantic"). Consummation of the
acquisition is contingent upon FCC approval and other consents and is
anticipated to occur during the third quarter of 1998. This agreement provides
that the Registrant will acquire cellular licenses that will include the entire
state of Vermont (RSA 1, RSA 2 and the Burlington Metropolitan Statistical
Area); western New Hampshire (RSA 1); the northeastern corner of New York (RSA
2); and northwestern Massachusetts (RSA 1). Atlantic has approximately 1.1
million POPs (population served). The total purchase price will be approximately
$256 million, which will be financed through long-term borrowings for which the
Registrant has received preliminary commitments. According to information
provided to the Registrant, Atlantic currently serves approximately 68,000
customers and posted revenues of $40 million for the year ended December 31,
1997.
On February 19, 1998, the Registrant entered into an agreement to acquire the
cellular telephone license, operations and related assets of Western Maine
Cellular, Inc. ("WMC"), a wholly-owned subsidiary of Utilities, Inc. The total
purchase price will be $7.5 million, which will be financed through long-term
borrowings for which the Registrant has received preliminary commitments. WMC is
licensed to provide cellular communications services in RSA 1, covering Oxford
and Franklin Counties of Maine. WMC's service area will link the Company's
existing cellular operation in central Maine to the multi-state cellular system
of Atlantic Cellular to the west and south. WMC has approximately 84,000 POPs.
According to information provided to the Registrant, WMC serves more than 2,400
customers and posted revenues of $1.6 million for the year ended December 31,
1997.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
99.1 Press release dated February 18, 1998, announcing
acquisition of Atlantic Cellular
99.2 Press release dated February 26, 1998, announcing
acquisition of Western Maine
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RURAL CELLULAR CORPORATION
/s/ Richard P. Ekstrand
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RICHARD P. EKSTRAND
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Date: February 27, 1998
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Exhibit 99.1
RURAL CELLULAR CORPORATION SIGNS DEFINITIVE AGREEMENT TO ACQUIRE
CELLULAR ASSETS OF ATLANTIC CELLULAR COMPANY, L.P.
CONTIGUOUS SERVICE AREA IN VERMONT, NEW HAMPSHIRE, NEW YORK
AND MASSACHUSETTS TOTALS 1.1 MILLION POPS AND 68,000 CUSTOMERS
FEBRUARY 18, 1998--ALEXANDRIA, MN--Rural Cellular Corporation (Nasdaq/NMS:
RCCC) today announced it has entered into a definitive agreement to acquire the
Vermont, New Hampshire, New York and Massachusetts cellular telephone licenses,
operations and related assets of Atlantic Cellular, one of the leading
independent providers of wireless telecommunications services in the New England
region. Rural Cellular Corporation is acquiring the Atlantic Cellular assets for
a purchase price of $256 million in cash. Long-term financing to support this
acquisition has been arranged through Toronto Dominion Bank, which also acted as
financial advisor to Rural Cellular Corporation.
The transaction, which follows the Company's May 1997 acquisition of Unicel, a
Maine cellular operation, is subject to regulatory approval and is expected to
be completed this summer.
Under terms of the definitive agreement, the Company will acquire a contiguous,
multi-state service area of 21,000 square miles, encompassing approximately 1.1
million POPs (population served). This will bring the Company's total managed
POPs to 2.85 million. In addition, the 68,000 cellular customers in the
Atlantic Cellular service area will increase the Company's cellular customer
base from approximately 111,000 at year-end 1997 to 179,000.
The cellular properties to be acquired from Atlantic Cellular include: the
entire state of Vermont (RSA 1, RSA 2] and the Burlington [MSA]); western New
Hampshire (RSA 1); the northeastern corner of New York (RSA 2); and northwestern
Massachusetts (RSA 1) as well as their long-distance business.
Richard Ekstand, Rural Cellulars's president and chief executive officer, said:
"We believe, with a majority share of its New England cellular service area,
Atlantic Cellular is considered the wireless provider of choice in its markets.
Having invested over $40 million in cellular infrastructure over the past few
years, Atlantic Cellular enjoys a clear competitive advantage in its markets in
terms of cellular coverage. Atlantic Cellular's distribution system and
customer service are also believed to be second to none in its service area. As
a result, Atlantic Cellular has recorded impressive customer and revenue growth
and generated consistently strong levels of EBITDA."
Ekstand added, "This pending acquisition, which gives us the opportunity to
significantly expand our presence in New England, is fully in line with our
strategy of providing high-quality wireless communication services to the rural
marketplace. The Atlantic Cellular properties possess economic and demographic
characteristics similar to our wireless markets in northern Minnesota and Maine.
All in all, we are genuinely excited at having the opportunity to purchase these
high quality wireless properties that serve such attractive rural markets."
The cellular systems of Atlantic Cellular are strategically clustered within
short drive times to New York, Boston, Montreal, Albany, Hartford and
Providence, which have a combined Metropolitan Service Area population of more
than 31 million. More than 10 million tourists visit these New England markets
each year. In addition, Atlantic Cellular's contiguous service area is traversed
by four interstate highways, linking New York, Boston, Hartford and Montreal.
For these reasons, the Atlantic Cellular service area generates substantial
volumes of high-margin roaming traffic.
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Exhibit 99.1
Atlantic Cellular's fully developed cellular network currently consists of over
80 cell sites enabling it to provide hand-held cellular coverage in many of the
major population centers, heavily traveled highway corridors and major tourist
locations within its service area. Atlantic Cellular, which operates
significantly more cell sites than its cellular competition across its entire
service area, is also a cellular provider in its markets with locally based
customer service support.
This multi-state cellular operation will be independently managed as a wholly
owned subsidiary of Rural Cellular Corporation, with operational headquarters
near Burlington, Vermont.
Rural Cellular Corporation provides wireless telecommunications services in
northern Minnesota, contiguous portions of western Wisconsin and eastern North
Dakota, and portions of Maine.
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FINANCIAL CONTACT: MEDIA:
Wesley E. Schultz (CFO) Ann Elliott (Manager, Corporate Communications)
320/762-2000 320/808-2104
World Wide Web address: http://www.rccwireless.com
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Exhibit 99.2
RURAL CELLULAR CORPORATION SIGNS DEFINITIVE AGREEMENT TO ACQUIRE
CELLULAR ASSETS OF WESTERN MAINE CELLULAR
FEBRUARY 26, 1998--ALEXANDRIA, MN--Rural Cellular Corporation (RCC)
(Nasdaq/NMS: RCCC) today announced it has entered into a definitive agreement to
purchase the outstanding stock of Western Maine Cellular, Inc. (WMC), a
wholly-owned subsidiary of Utilities, Inc., for $7,500,000. Pending regulatory
approval, the acquisition is expected to close this summer.
Providing cellular service to western Maine (RSA 1), WMC's service area will
link the Company's existing cellular operation in central Maine, operated under
the name Unicel-Registered Trademark-, to the multi-state cellular system of
Atlantic Cellular to the west and south. RCC recently entered into a definitive
agreement to acquire the Vermont, New Hampshire, New York and Massachusetts
cellular telephone licenses, operations and related assets of Atlantic Cellular,
operated under the name CellularOne-Registered Trademark-.
Richard Ekstrand, Rural Cellular's president and chief executive officer, said:
"We believe the pending acquisition of WMC will be of major strategic
importance, since it will enable us to establish a contiguous cellular footprint
encompassing portions of four New England states and the entire state of
Vermont, and position RCC as a leading provider of wireless communications
services in the New England region."
Ekstrand added, "Since WMC's cellular system is at a relatively early stage of
development, we see significant potential for customer and revenue growth as we
invest in additional network infrastructure and implement our proven
distribution system."
WMC's 3,700 square-mile service area of western Maine encompasses 84,000 POPs
(population served), and the operation serves more than 2,400 customers.
Including the pending Atlantic Cellular acquisition, this would bring the
Company's total POPs to approximately 2.93 million and wireless customers to
approximately 181,000. At year-end 1997, the Company's POPs and total customers
were 1.75 million and 111,000, respectively.
Rural Cellular Corporation provides wireless telecommunications services in
northern Minnesota, contiguous portions of western Wisconsin and eastern North
Dakota, and portions of Maine.
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Contact: Ann Elliott (Manager, Corporate Communications), 320/808-2104
World Wide Web address: http://www.rccwireless.com
