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
Softbanks 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