Friday, June 27, 2008

Virgin Mobile Buys Helio For $39M

Virgin Mobile said Friday morning that it has signed an agreement to acquire Helio, the Los Angeles-based MVNO that is a joint venture of Earthlink and SK Telecom. According to Virgin Mobile, it will pay $39M for Helio. The deal is expected to close in the third quarter of the year. Virgin Mobile said the deal is expected to give it entry into the postpaid mobile phone market, and approximately 170,000 existing subscribers. Virgin Mobile said Helio also had an inventory of around 80,000 handsets, worth approximately $17M in book value. Virgin Group and SK Telecom will each put $25M into the company, for a total of $50M; that investment will give SK Telecom approximately 17% of Virgin Mobile USA, and two seats on the board. The sale represents a huge loss for both Earthlink and SK Telecom, which have put several hundred million into Helio. Helio and SK Telecom said in May that they were in talks to sell Helio to Virgin Mobile USA.