Existing Boost and Virgin Mobile USA Customers Will Continue With Current Services and Plans
OVERLAND PARK, Kan. & WARREN, N.J.--(BUSINESS WIRE)--Sprint Nextel Corporation (NYSE:S - News) and Virgin Mobile USA, Inc., (NYSE: VM - News) 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
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.”
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
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
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
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.
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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Leigh Horner, (703) 433-3044
Virgin Mobile USA, Inc.
Jayne Wallace, (908) 607-4014
Investor Relations Contacts:
Yijing Brentano, (800) 259-3755
Virgin Mobile USA, Inc.
Erica Bolton, (908) 607-4108