Sprint to Buy Virgin Mobile USA; Deepens Prepaid Biz

Shares of Virgin Mobile USA (VM), a part of Sir Richard Branson’s privately held Virgin Group, are up 97 cents, or 23%, at $5.18 today after Sprint Nextel (S) announced it will acquire the firm for $5.50 per share in Sprint stock, for a total consideration of $483 million.

Sprint, which already held a roughly 13% interest in the company, will acquire the portion held by Virgin Group and by South Korean carrier SK Telecom (SKT).

Virgin Mobile USA, which has roughly 5 million subscribers, brings Sprint more deeply into the pre-paid mobile business, as that has been most of Virgin Mobile USA’s customer base, about half of which are under 35. Virgin Mobile USA purchased the “Helio” youth-oriented service in August of last year.

Virgin Mobile USA reported Q1 revenue of $318 million, up 4%, back in May, and an 83% rise in adjusted Ebitda.

Sprint shares today are down 8 cents, or 1.8%, at $4.47.