1. Sprint + Soft
Bank
Sprint - Softbank
Dutta Roy & Team
M&A Analysis

2. 01. Background

3. 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
• 3rd largest carrier in Japan
•Growth Strategy
•Global market launch

4. 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

5. 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

7. Market Multiples

8. Assumptions

9. Valuation
7.78
6.91
4
5
6
7
8
9
10
11
WACC-DCF $/Share APV $/Share
Min
Max
Sprint

10. 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

11. 02. Recommendations

12. 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!

13. Q&A