Disqus
A month ago Virgin Mobile USA said that it will acquire Helio for $39 million. The Richard Branson-Sprint’s MVNO has announced that it’s a done deal. Under the terms of the agreement, Helio shareholders (SK Telecom and EarthLink) got 13 million shares of Virgin Mobile USA Class A common stock, or about $38 million based on the average closing price. Additionally, SK Telecom and Virgin Group will each invest $25 million in Virgin Mobile USA for preferred shares.
According to Virgin Mobile USA’s CEO, Dan Schulman, with the acquisition of Helio the company gets:
- a set of unique and differentiated data applications;
- entry into the postpaid market, with a sophisticated billing and customer care platform;
- approximately 170,000 Helio customers;
- revised terms for the Sprint PCS Services Agreement, expected to result in an 8% reduction in the Company’s effective cost per minute in 2009;
- reduction in net debt of approximately $35 – $40 million, through the investments of $25 million each by SK Telecom and Virgin Group in the form of preferred mandatory convertible stock at the price of $8.50 per share;
- an increase to Virgin Mobile USA’s total revolver from $75 million to $135 million, through additional commitments of $25 million by Virgin Group and $35 million by SK Telecom; and
- the addition of SK Telecom as a strategic shareholder with two seats on the Company’s Board of Directors.
We wish all the best to the bigger company and look forward to see Virgin Mobile USA introducing new products and services in the future.
About The Author
Dusan Belic
Dusan has been using smartphones since their introduction and is now following the latest trends in the industry. The "convergence" is what he's most excited about, and writing about it is the next logical thing to do. He thinks that using a smartphone is what everyone who cares about their time should do. In addition to his interests in mobile phones, Dusan also loves to experiment with the latest web and mobile 2.0 services. The idea of accessing and managing your information from any device no matter where you are simply amazes him. Whether it's an online to-do list, note taking service or a video sharing social network, he's there to try it out. He admits though, he's still searching for the ultimate web-based organizational tool, which "sings" perfectly with the mobile PIM application. Dusan used to run SymbianWatch.com which later became part of IntoMobile. He lives in Serbia, South-East Europe, from where he edits the site on a daily basis.
