Virgin Mobile USA to Acquire Helio
Virgin Mobile USA, Inc. announced that it has entered into an agreement to acquire Helio, a joint venture between SK Telecom and EarthLink, Inc. Under the terms of the agreement, Virgin Mobile USA will acquire Helio from SK Telecom and EarthLink for limited partnership units equivalent to 13 million shares of Virgin Mobile USA class A common stock, with a value of $39 million based on the closing price of Virgin Mobile USA's class A shares on June 26, 2008.
Acquiring Helio's customers and expanding its offer portfolio is expected to increase Virgin Mobile USA's volume of minutes and drive down the Company's cost per minute under an amendment to its PCS Services agreement with Sprint.
Helio has been at the forefront in developing leading data services, in partnership with You Tube, Google and MySpace. Virgin Mobile USA will use this unique intellectual property to strengthen its competitive position in the prepaid, hybrid and postpaid markets while moving its handset lineup upmarket. Consequently, the Company expects to drive incremental growth in data revenues in the future.The transaction is expected to close in the third quarter of 2008, subject to receiving regulatory approvals and satisfaction of other customary closing conditions.
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