T-Mobile US Inc. is acquiring Mint Mobile, the low-cost mobile carrier partially owned by actor Ryan Reynolds, for up to $1.35 billion to bolster its prepaid phone business and reach more low-income customers.
The second-largest U.S. wireless carrier is acquiring Mint’s parent company, Ka’ena Corp., for a combination of 39% cash and 61% stock, according to a statement issued Wednesday. The final purchase price is based on Mint meeting certain performance targets both before and after closing the transaction. Bloomberg News first reported on the sales talks in January.
Reynolds, who owns an undisclosed but “significant” stake in Mint, will continue to act commercially on behalf of the company, co-founder David Glickman said in an interview, adding that the actor has incentives “to continue for years to come.” Reynolds previously reportedly owned about 25% of the company.
Glickman and his partner Rizwan Kassim join T-Mobile and run the company, which includes Ultra Mobile, an international telephone service.
Reynolds tweeted on Wednesday: “I never dreamed of owning a cell phone company, and I certainly never dreamed of selling it to T-Mobile. Life is strange and I am incredibly proud and grateful.”
Mint offers some of the cheapest mobile plans in the country, starting at $15 per month for 4 gigabytes of wireless data. The companies have not disclosed Mint’s subscriber count. Annual subscriber growth over the past four years has been 50% and revenue growth has been 70% or more each year, Glickman said.
The company has no retail stores and sells cell phones and cell phone subscriptions entirely online. The service is already provided by T-Mobile under a major network sharing agreement.
“Mint’s formula works, the brand is growing rapidly, and we can further drive it by leveraging the purchasing power of phones and marketing,” said Mike Katz, T-Mobile’s president of marketing. The Bellevue, Washington-based airline also operates its own prepaid brand called Metro.
The pay-as-you-go market is credited as the source of the overall subscriber growth as customers with credit problems eventually gravitate towards regular monthly billing. Mint competes with other prepaid phone brands, including AT&T Inc.’s Cricket, Verizon Communications Inc.’s Total, and Dish Network Corp.’s Boost Mobile.
T-Mobile expects the deal to close later this year and expects no changes to its financial outlook for 2023. Mint will be “modestly attractive” for adjusted earnings before interest, taxes, depreciation and amortization. Shares were little changed Wednesday morning in New York at $143.09.
Reynolds, a pitchman and co-owner of Aviation Gin, sold the brand to Diageo Plc for $610 million in 2020, with nearly half of that potential payment based on 10-year sales performance.
The actor, best known for his work on the superhero series Deadpool, met Glickman through her work with the Michael J. Fox Foundation for Parkinson’s Research. Reynolds also co-owns the Welsh football team Wrexham AFC, which has featured in a documentary series on the FX network.
“We are pleased that T-Mobile declined an aggressive last-minute offer from my mother, Tammy Reynolds, as we believe the excellence of its 5G network is a better strategic fit than my mother’s somewhat superior average mahjong skills” , Reynolds joked. . in the statement.
Source: LA Times