Tags : sprint, Virgin Mobile, Virgin Mobile USA
Sprint Buys Virgin Mobile USA For $483M, Virgin Group Keeps Ownership Rights
If you were reading the headline for this post and scratching your head don’t worry you weren’t alone, so was I at first. It turns out that Sprint Wireless has agreed to purchase Virgin Mobile USA at a cost of $483 million. While the purchase will not give full control of America’s largest MVNO (prepaid wireless) company to Dan Hesse and his brood, it should help strengthen the companies prepaid positions.
Under the terms of the agreement Sprint will pay the $248m dollars of debt incurred by Virgin Mobile USA, while paying the remaining amount to satisfy Sprint’s current 13.1% fully diluted ownership interest in the company plus any other outstanding expenses.
Currently Virgin Mobile USA already operates under the Sprint CDMA network and will join Sprint’s own offering Boost Mobile. After Virgin Mobile’s acquisition of Helio in June 2008 this purchase by Sprint significantly shrinks the oft failing MVNO market.
The deal will allow Sprint to strengthen their market share in terms of prepaid phone usage, while also allowing them to cross sell their own products to Virgin Mobile USA customers. Combined with Boost Mobile the company now has a grasp on different demographics targeted by each of their prepaid offerings.
Under the current deal the Virgin Group will retain ownership rights for $12.7 million until December 31st 2021. [thanks Slashgear]
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