Sprint Nextel is buying Virgin Mobile USA, for a
total equity value of approximately $483 million, which includes the
value of Sprint's current 13.1% fully diluted ownership interest in
Virgin Mobile USA.
They believe that the acquisition will strengthen Sprint's 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.
They listed the Transaction Benefits
- Strengthens Sprint's position in the fast growing prepaid segment.
- Enhances cross selling of full suite of Sprint products and services across a larger target audience.
- Free cash flow accretive for Sprint before synergies.
- Synergies to be derived from general and administrative reductions, operational efficiencies, and streamlined distribution.
- Sprint gains deeper managerial talent with additional expertise in the prepaid segment.