Clarity Partners Snaps Up PrimeCo –

Independent wireless service provider PrimeCo Personal Communications was recently acquired in a deal sponsored by a group of half a dozen investors led by Clarity Partners. Other investors include Green Leaf Ridge Co., Pacific Capital Partners, and Trimaran Capital Partners. JP Morgan Chase & Co. provided the senior credit facility for the transaction. Terms of the transaction were undisclosed. The deal is scheduled to close at the end of Q3.

Verizon Communications Inc. was required to divest itself of PrimeCo to comply with FCC regulations stating that companies can own only one wireless license per market. It was under an FCC deadline to find a new owner by June 26, which was when the investor group agreed to acquire the asset.

PrimeCo Personal Communications owns 20MHz of Chicago’s PCS spectrum and serves 13 million customers with revenue of approximately $200 million. “Some people say we’re buying just a particular market, but it is bigger than half of the countries in Western Europe, four times the size of Ireland and about the size of the Netherlands,” said Barry Porter, a managing general partner at Clarity. “So it is a pretty decent-sized coverage with great demographics.”

Porter analogized PrimeCo Personal Communications to prime beach front property. “You can do more with contiguous spectrum than spectrum that is cobbled together,” he said.

Porter also added that valuations for spectrum assets “are all over the place,” with some entities valued “anywhere from a couple of thousand dollars per subscriber to well north of $10,000 per subscriber.”

Without divulging too much of the investor group’s plans for the spectrum, Porter said the group will “target more vertical markets within the Chicago population” such as pre-pay, Hispanic and black communities, youth, and college students. “Every other player in the marketplace is a national player and our competitive advantage will be that we’ll have better in-market knowledge, we’ll run it in a much more entrepreneurial way, and try to respond very quickly to the specific needs of the Chicago marketplace,” Porter said.