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Sprint Completes Acquisition of Virgin Mobile USA

*Press Release* Sprint Nextel Completes Acquisition of Virgin Mobile USA Existing Boost and Virgin Mobile USA Customers Will Continue With Current ...

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    News Sprint Completes Acquisition of Virgin Mobile USA

    *Press Release*

    Sprinticon Nextel Completes Acquisition of Virginicon Mobile USA

    Existing Boost and Virginicon Mobile USA Customers Will Continue With Current Services and Plans

    OVERLAND PARK, Kan. & WARREN, N.J.--(BUSINESS WIRE)--Nov. 24, 2009-- Sprinticon Nextel Corporation (NYSE:S) and Virgin Mobile USA, Inc., (NYSE: VM) today announced that they have completed their previously announced merger transaction. The acquisition of Virgin Mobile USA strengthens Sprint’s position in the growing prepaid segment by bringing together the iconic Virgin Mobile brand with Sprint’s successful Boost Mobile business.

    Earlier today, Virgin Mobile USA stockholders approved the transaction with Sprint. With this approval, all closing conditions for the transaction were met.

    “With continued growth in the U.S. prepaid segment, Sprint is further positioning itself as a leader,” said Dan Hesse, Sprint CEO. “With Boost’s continued success and the iconic Virgin Mobile brand under one umbrella, Sprint will offer customers value and flexibility with great devices running on a dependable network with great coverage.”

    Merger Transaction

    Virgin Mobile USA stockholders will receive shares of common stock of Sprint Nextel based on the exchange ratios described below, and cash in lieu of fractional shares.

    Virgin Mobile USA Public Stockholders:

    All stockholders of Virgin Mobile USA (excluding Sprint Nextel, the Virgin Group and SK Telecom) will receive 1.3668 shares of Sprint Nextel common stock for each share of Virgin Mobile USA Class A common stock.

    The Virgin Group:

    The Virgin Group will receive 1.2724 shares of Sprint Nextel common stock for each share of Virgin Mobile USA common stock owned by the Virgin Group.
    The Virgin Group will receive 149.6941 shares of Sprint Nextel common stock for each share of Virgin Mobile USA preferred stock owned by the Virgin Group.
    SK Telecom:

    SK Telecom will receive 1.2279 shares of Sprint Nextel common stock for each share of Virgin Mobile USA common stock owned by SK Telecom.
    SK Telecom will receive 144.4588 shares of Sprint Nextel common stock for each share of Virgin Mobile USA preferred stock owned by SK Telecom.
    All of Virgin Mobile USA’s outstanding debt has been retired, including amounts due under its Senior Secured Credit Facility and its related party Subordinated Secured Revolving Credit Agreement.

    Sprint Nextel elected to make each of the payments required pursuant to the Trademark License Agreement, the Tax Receivable Agreement and the Subordinated Secured Revolving Credit Agreement in cash.

    Virgin Mobile USA’s Class A common stock will cease trading on the NYSE as of the closing of the market today and will be delisted.

    Seamless Transition

    Customers using Sprint’s Boost Mobile or Virgin Mobile USA’s products and services will continue to enjoy the benefits of their current phones, service plans and features and do not need to take any action.

    An experienced management team will lead Sprint’s prepaid group. Dan Schulman, formerly the CEO of Virgin Mobile USA, is now the president and Matt Carter, former head of Boost, will lead the sales and marketing efforts for the combined prepaid group.
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    Default Re: Sprint Completes Acquisition of Virgin Mobile USA

    Isn't Virginicon Mobile USA just a virtual operator (MVNO) using Sprintsicon physical network? What advantage does Sprinticon have buying a MVNO that uses their network anyway? Will Sprint keep the Virginicon branding?
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    Default Re: Sprint Completes Acquisition of Virgin Mobile USA

    RadioRaiders,

    Virginicon Mobile has a well operating pre-pay system, and Sprinticon does not. There's a lot of money there in these troubled ecconomic times.

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    Default Re: Sprint Completes Acquisition of Virgin Mobile USA

    the customer base, and the solid brand will be highly beneficial to Sprinticon while they're going through rough debt and the whole WiMax money hole. like COtech said, Sprinticon doesnt have a prepay division. buying Virginicon Mobile is the first step towards adding one and building upon it. I would argue that keeping the brand name is crucial however because it is one that people may respect more than the Sprint one which has been getting some punches as of late because of customer loss money spent on the WiMax network, etc.
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    Default Re: Sprint Completes Acquisition of Virgin Mobile USA

    This is smart. It has epic win all over it.

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    Default Re: Sprint Completes Acquisition of Virgin Mobile USA

    Quote Originally Posted by RadioRaiders View Post
    Isn't Virginicon Mobile USA just a virtual operator (MVNO) using Sprintsicon physical network? What advantage does Sprinticon have buying a MVNO that uses their network anyway? Will Sprint keep the Virginicon branding?
    Instead of it being an MVNO using Sprint's network, it is now an owned part of Sprint, with all the benefits that come with that. Sprint can reap the benefits of owning a respected MVNO and build upon it, as others have mentioned.

    Keeping the Virgin Mobile name is a smart move because of VM's positive brand awareness and reputation.
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