Sprint Nextel Completes Acquisition of Virgin Mobile USA
November 24 2009 - 2:35PM
Business Wire
Sprint 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.
About Sprint Nextel
Sprint Nextel offers a comprehensive range of wireless and
wireline communications services bringing the freedom of mobility
to consumers, businesses and government users. Sprint Nextel is
widely recognized for developing, engineering and deploying
innovative technologies, including two wireless networks serving
more than 48 million customers at the end of the third quarter of
2009 and the first and only 4G service from a national carrier in
the United States; industry-leading mobile data services; instant
national and international push-to-talk capabilities; and a global
Tier 1 Internet backbone. The company’s customer-focused strategy
has led to improved first call resolution and customer care
satisfaction scores. For more information, visit
www.sprint.com.
"Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995
This press release includes forward-looking statements regarding
the acquisition and related transactions that are not historical or
current facts and deal with potential future circumstances and
developments, in particular information regarding the rate of
growth in the prepaid wireless segment and expected synergies from
the acquisition. Forward-looking statements are qualified by the
inherent risk and uncertainties surrounding future expectations
generally and may materially differ from actual future experience.
Risks and uncertainties that could affect forward-looking
statements include: the failure to realize synergies as a result of
operational efficiencies, streamlined distribution and general and
administrative reductions in the timeframe expected or at all;
unexpected costs or liabilities; and the risks that are described
from time to time in Sprint Nextel’s and Virgin Mobile USA’s
respective reports filed with the Securities and Exchange
Commission (SEC), including the annual report on Form 10-K for the
year ended December 31, 2008 and quarterly report on Form 10-Q for
the quarter ended September 30, 2009 of each of Sprint Nextel and
Virgin Mobile USA. This press release speaks only as of its date,
and Sprint disclaims any duty to update the information herein.
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