Sprint + Soft Bank

Sprint - SoftbankDutta Roy & TeamM&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• 3rd 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

Valuations

Market Multiples

Assumptions

Valuation

WACC-DCF $/Share APV $/Share4

5

6

7

8

9

10

7.78

6.91

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 - $9Softbank’s Financing Choices Cash : 1/3

Debt : 2/3Ratio 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