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Sprint + Soft

Bank
Sprint - Softbank
Dutta Roy & Team
M&A Analysis
01. Background
Background
•Soft Bank
• Venture finance
• Japanese wireless provider
• Information Technology
• Bought Vodafone-Japan in 2008
• 16% CAGR in subscribers since
• Consistent pay down of debt
• 3
rd
largest carrier in Japan
•Growth Strategy
•Global market launch
Background
• Wireline turned wireless
powerhouse
• Focused US footprint
• International highspeed IP
backbone
• Remarkable subscriber loss
starting 2010 spurred by lack
of game changing iphone
offering
• Survival Strategy – Capital
investment
Opportunity
•Sprint
• Attractive US market
• Investing in infrastructure
• 54% ownership and offer for 100% of Clearwire (4G LTE
infrastructure)
• Potentially looking for a capital investor
•NewCo=SoftBank+Sprint
• Largest TEV wireless provider in Japan
• SoftBank gets Clearwire positioned in US
• Global Telecom
Market Multiples
Assumptions
Valuation
7.78
6.91
4
5
6
7
8
9
10
11
WACC-DCF $/Share APV $/Share
Min
Max
Sprint
Synergy
❖ Through Operational Expenditures:
➢ Economies of Scale on Procurement
■ Devices = Smart Phone, Network materials
■ Improving credit screening & pricing structure
➢ Network
■ Traffic Management, Best Practices (Softbank - vodafone exp)
➢ Human Capital & other Operational Efficiency
■ Customer Care Service Structure
■ Improved handling times (global cross functionial support)

Annual Synergies:
$2B from 2014-2017
Effective Tax Rate: 35%
Discount Rate: ~10%
Terminal Growth: ~1.5%
$4.46 per Share
02. Recommendations
Deal Dynamics
Negotiating Range (Share Price) $6 - $9
Softbank’s Financing Choices Cash : 1/3
Debt : 2/3
Ratio of Ownership Softbank : 75%
Sprint : 25%
Exchange Ratio for Sprint 0.34
Exchange Ratio for SoftBank 1
Sprint capital infusion 12.5 B
Synergy Share $3.35 x 3 B
shares
Do The Deal – Soft Bank To Acquire Sprint!
Q&A