“Frenemies” – friend/enemies – iPCS and Sprint Nextel have apparently settled their differences. Today, Sprint said it would buy iPCS for $426 million in cash.

IPCS is a Sprint PCS affiliate that has sued Sprint repeatedly over the terms of its contract with its parent operator. IPCS has argued that Sprint violated the terms of its contract by offering competing services in iPCS’ markets.

The affiliate has sued Sprint over its deal with Clearwire and its recent acquisition of Virgin Mobile USA. In addition, an appeals court upheld a previous ruling that Sprint had to stop offering Nextel-branded services in iPCS’ territory, forcing Sprint to divest those assets.

The buyout puts a stop to ongoing litigation between the two companies and allows Sprint to hold onto the iDEN assets it previously planned to divest as part of a settlement deal with iPCS.

IPCS resells Sprint services in 81 markets throughout Illinois, Michigan, Pennsylvania, Indiana, Iowa, Ohio and Tennessee. The acquisition will net Sprint more than 700,000 PCS wireless customers, 270,000 wholesale customers and extends the company’s direct service territory to an additional 12.6 million people.

In a statement, iPCS President and CEO Timothy Yager said he was “very pleased to have reached this agreement with Sprint Nextel” and looked “forward to working with the Sprint Nextel team to ensure a smooth completion of the transaction and transition in the coming months.”

About 9.5 percent of iPCS shareholders have already agreed to the deal, which is expected to close either late in the fourth quarter of 2009 or early 2010.

Sprint CEO Dan Hesse promised iPCS’ current customers “will see a seamless transition” throughout the acquisition. iPCS’s services are sold under the Sprint brand name and in Sprint-branded stores.