Virgin Mobile acquires Helio
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Virgin Mobile USA, Inc. today announced that it has acquired Helio, a joint venture between SK Telecom and EarthLink, Inc. As part of the deal, 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.
Helio has approximately 170,000 existing subscribers with an Average Revenue Per User ( ARPU ) of approximately $80 and a handset inventory of approximately 85,000 units.
With the acquisition of Helio, Virgin Mobile USA will use Helio’s data applications into it’s suite of products, services and gain Helio’s postpaid billing and customer care platform. For Helio, they are now part of a bigger comapny that boasts 17 million subscribers.
Virgin Mobile USA also announced that Virgin Group and SK Telecom will each invest $25 million of equity capital in the Company, creating an aggregate investment of $50 million. The investments will take the form of mandatory convertible preferred stock, convertible to Class A common stock at $8.50 per share, pending shareholder approval. The preferred shares will carry a four-year maturity and a 6% annual dividend. Upon approval of Virgin Mobile USA’s shareholders, the preferred stock will convert into Class A common shares when the shares reach the conversion price or upon maturity.
SOURCE: HELIO, VirginMobile USA
