Item 1A. Risk Factors
ITEM 1A. RISK FACTORS
Risks Relating to Our Proposed Acquisition of Sprint Communications
Regulatory approvals necessary for our acquisition of Sprint Communications may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that could have an adverse effect on the combined company following closing of the acquisition.
Subject to the satisfaction of the required closing conditions, we expect the acquisition to close in the second half of 2023. Any failure to close or an extended delay in the closing may have an adverse effect on us.
Our acquisition of Sprint Communications requires us to obtain certain regulatory approvals, waivers or consents. These regulators may impose conditions on these approvals. Such conditions could have the effect of delaying or preventing the completion of the transaction, causing us to incur additional costs or limiting the competitive position of the combined company following the transaction. Any of these conditions might have an adverse effect on the combined company following the transaction. Additionally, any delay in closing may adversely affect our business, the business of Sprint Communications or the business of the combined company, including an adverse effect on Sprint Communications’ ability to retain key employees during the transition period or on Sprint Communications’ relationship with its customers or vendors if such parties attempt to terminate, or negotiate changes in, their existing business relationships, consider entering into business relationships with competitors of Sprint Communications or otherwise delay or defer decisions concerning their business with Sprint Communications.
We may not realize the anticipated benefits of the acquisition of Sprint Communications, and the integration of Sprint Communications may disrupt our business and management.
In September 2022, we announced our acquisition of Sprint Communications. The success of our acquisition of Sprint Communications, including the realization of anticipated benefits and cost savings, will depend, in part, on our ability to successfully combine our business and the Sprint Communications’ business The integration may be more difficult, costly or time consuming than expected. The integration process involves numerous risks. These risks include:
● inability to achieve the financial and strategic goals for the acquired and combined businesses;
● inability to achieve the projected cost savings for the acquired and combined businesses;
● difficulty in, and the cost of, effectively integrating the operations, technologies, products or services, and personnel of the acquired business;
● entry into markets in which we have minimal prior experience and where competitors in such markets have stronger market positions;
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● disruption of our ongoing business and distraction of our management and other employees from other opportunities and challenges;
● inability to retain personnel of the acquired business;
● inability to retain key customers, vendors and other business partners of the acquired business;
● inability to take advantage of anticipated tax benefits;
● incurring acquisition-related costs or amortization costs for acquired intangible assets that could impact our operating results;
● elevated delinquency or bad debt write-offs related to receivables of the acquired business we assume;
● difficulty in maintaining internal controls, procedures and policies during the transition and integration;
● impairment of our relationships with employees, customers, partners, distributors or third-party providers of our technologies, products or services;
● failure of our due diligence processes to identify significant problems, liabilities or other challenges of the acquired company or technology;
● exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, the acquisition, such as claims from terminated employees, customers, or other third parties;
● inability to conclude that our internal controls over financial reporting are effective;
● delay in customer purchasing decisions due to uncertainty about the direction of our product and service offerings;
● increased accounts receivables collection times and working capital requirements associated with acquired business models; and
● incompatibility of business cultures.
If we experience difficulties during the integration process and are unable to integrate the acquired business successfully or in a timely manner, we may not realize the benefits of the acquisition to the extent anticipated. These integration matters could have an adverse effect on us during the transition period and on the combined company for an undetermined period after completion of the acquisition of Sprint Communications.
Except as set forth herein, management believes that as of September 30, 2022, there have been no material changes to our risk factors from those disclosed in Item 1A “Risk Factors” of our annual report on Form 10-K for the year ended December 31, 2021.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.