Posted on 29-Jul-2009 10:43
Filed under: News
The borad of directors of both Sprint Nextel Corporation and Virgin Mobile USA, Inc. have approved a definitive agreement for Sprint to acquire Virgin Mobile USA for a total equity value of approximately US$483 million, which includes the value of Sprint’s current 13.1% fully diluted ownership interest in Virgin Mobile USA.
In addition, at closing Sprint will retire all of Virgin Mobile USA’s outstanding debt, which is US$248 million net of cash and cash equivalents as of 31 March 2009, but is expected to be no more than $205 million net of cash and cash equivalents on 30 Sept. 2009.
Sprint says this acquisition will strengthen its position in the growing prepaid segment by bringing together under one umbrella the iconic Virgin Mobile brand with Sprint’s successful Boost Mobile business. These complementary prepaid brands, each with a distinctive offer, style and appeal to different customer demographics, will continue to serve existing and prospective customers following the completion of the transaction.
Following the closing of the transaction, Sprint’s prepaid business will be led by Dan Schulman, current Virgin Mobile USA chief executive officer, who will report directly to Dan Hesse, Sprint Nextel president and chief executive officer. Bringing exceptional telecom leadership credentials to Sprint, Schulman will be responsible for the business strategy and growth of the prepaid segment. Matt Carter will continue to lead Boost Mobile and will report to Schulman.
“The acquisition of Virgin Mobile USA positions Sprint for even greater success in the prepaid wireless segment,” said Hesse. “Prepaid is growing at an unprecedented rate with consumers keenly focused on value. Virgin Mobile is an iconic brand in the marketplace that will complement our Boost Mobile brand.”