After rumors swirled around the Internet for a month, Virgin Mobile USA Inc. finally agreed to acquire SK Telecom Co.'s Helio LLC for $39 million in stock, which is less than a tenth what Helio was valued at launch three years ago. Although the deal was widely expected -- especially after reports that Helio closed stores this week -- terms were scarce until Friday's formal announcement. Virgin Group and SK Telecom, the South Korean carrier that is the majority owner of Helio, will each invest $25 million in Virgin Mobile. The deals will give SK Telecom a 17% stake in Virgin Mobile -- down considerably from its 70% control. Seoul-based SK Telecom launched Helio, a so-called mobile virtual private network, which instead of operating its own network leases access from another company, in October 2005 as a joint venture with Atlanta-based Internet service provider EarthLink Inc., which held a 30% voting stake. At launch, the partners valued the startup at $440 million. In November 2007, the companies said that SK Telecom could invest up to $270 million more. Helio reportedly was struggling from the sluggish economy and competing telecoms. - Maria Woehr ...
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After rumors swirled around the Internet for a month, Virgin Mobile USA Inc. finally agreed to acquire SK Telecom Co.'s Helio LLC for $39 million in stock, which is less than a tenth what Helio was valued at launch three years ago. Although the deal was widely expected -- especially after reports that Helio closed stores this week -- terms were scarce until Friday's formal announcement. Virgin Group and SK Telecom, the South Korean carrier that is the majority owner of Helio, will each invest $25 million in Virgin Mobile. The deals will give SK Telecom a 17% stake in Virgin Mobile -- down considerably from its 70% control. Seoul-based SK Telecom launched Helio, a so-called mobile virtual private network, which instead of operating its own network leases access from another company, in October 2005 as a joint venture with Atlanta-based Internet service provider EarthLink Inc., which held a 30% voting stake. At launch, the partners valued the startup at $440 million. In November 2007, the companies said that SK Telecom could invest up to $270 million more. Helio reportedly was struggling from the sluggish economy and competing telecoms. - Maria Woehr ...