Virgin Confirms Helio Buy

In the end there are likely to be four carriers in the U.S. market that matter. Will Virgin be one of them? For the time being Virgin has decided in incrementally increase its share with the anticipated purchase of stuggling MVNO Helio.

According to the press release the terms and value of the deal are as follows:

  • Additional strategic investment totaling $50 million made by Virgin Group and SK Telecom at $8.50 per share
  • Improved capital structure through increased liquidity and $50 million paydown of senior secured credit facility
  • Incremental $60 million added to revolving credit facility - Maximum assumption of $10 million debt and $15 million net working capital liabilities - Net debt reduction of approximately $35 million upon closing
  • Approximately 170,000 Helio customers with approximately $80 ARPU
  • Entry into postpaid segment through acquisition of highly sophisticated customer platform supporting unique user applications
  • Improved network rates and ability to realize significant operational synergies

It's important to note that Virgin gets only 170K subscribers from this acquisition for a total of $39 million (in equity).