Ryan Reynolds-backed Mint is bought by T-Mobile for $1.35 billion

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(Bloomberg) — T-Mobile US Inc. is buying Mint Mobile, the budget wireless provider part owned by actor Ryan Reynolds, for up to $1.35 billion in an effort to grow its prepaid phone business and reach low-income customers.

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The US’s second-largest wireless provider is acquiring Mint’s close parent company, Kaena Corp, for a combination 39% cash and 61% stock, according to a statement on Wednesday. The final purchase price will be based on Mint reaching certain performance goals before and after the closing of the transaction. The sale talks were first reported by Bloomberg News in January.

Reynolds, who owns an undisclosed but “significant” stake in Mint, will continue to make commercial appearances on behalf the company, co-founder David Glickman said in an interview, encouraging the actor to “continue for years to come”. . Glickman and partner Rizwan Kasim will join T-Mobile and manage the business, which includes Ultra Mobile, an international phone service.

Mint offers some the lowest-priced mobile plans in the country, starting at $15 per month for 4 gigabytes of wireless data. The companies did not disclose the number of customers Mint has. Glickman said its annual subscriber growth has been 50% over the past four years, and revenue growth has been 70% or more.

The business has no stores, and sells phones and mobile plans entirely online. The service is already provided by T-Mobile as part a wholesale network-sharing agreement.

“Mint’s formula works, the brand is growing quickly and we can leverage the buying power phones and marketing to fuel it more,” said Mike Katz, president of marketing for T-Mobile. The Bellevue, Washington-based carrier also operates its own prepaid brand called Metro.

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The pay-as-you-go market is seen as a source overall customer growth as credit-challenged customers are eventually pulled into regular monthly billing. Mint competes with other prepaid phone brands, including Cricket from AT&T Inc, Total from Verizon Communications Inc and Boost Mobile from Dish Network Corp.

T-Mobile expects the deal to close later this year and doesn’t expect any changes to its 2023 financial outlook. Mint will be “slightly accretive” to adjusted earnings before interest, taxes, depreciation and amortization. Shares were little changed Wednesday morning at $143.09 in New York.

Reynolds, a pitchman and co-owner Aviation Gin, sold that brand to Diageo plc in 2020 for $610 million, with about half the potential payment based on sales performance over 10 years. The actor, best known for his work on the superhero series Deadpool, met Glickman through their joint work with the Michael J. Fox Foundation for Parkinson’s Research. Reynolds is also co-owner of the Welsh football team Wrexham AFC, which has been featured in a documentary series on the FX network.

Reynolds joked, “We are so pleased that T-Mobile beat out my mom Tammy Reynolds’ aggressive last-minute bid because we believe the excellence their 5G network will match my mom’s slightly above-average mahjongg skills.” provide a better strategic fit.” in the statement.

(update with shares)

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