T-Mobile has entered into an agreement to acquire Ka’ena Corporation, the parent company of Ryan Reynolds’ minority-owned prepaid wireless service Mint Mobile, international wireless service Ultra Mobile and wholesaler Plum, for a maximum of up to $1.35 billion in a combination of 39% cash and 61% stock.
Reynolds, whose stake in Mint is estimated to be between 20% and 25%, will continue on in his creative role as a spokesman for the company.
“We are so happy T-Mobile beat out an aggressive last-minute bid from my mom Tammy Reynolds as we believe the excellence of their 5G network will provide a better strategic fit than my mom’s slightly-above-average mahjong skills,” The “Deadpool” star joked in a statement. “I am so proud of the entire Mint team and so excited for what’s to come.”
Under the deal, T-Mobile is acquiring the brands’ sales, marketing, digital, and service operations. It plans to use its supplier relationships and distribution scale to “help the brands to grow and offer competitive pricing and greater device inventory to more U.S. consumers seeking value offerings.” It will also leverage Mint’s direct to consumer marketing expertise to reach new customer segments and geographies.
“Mint has built an incredibly successful digital direct-to-consumer business that continues to deliver for customers on the Un-carrier’s leading 5G network and now we are excited to use our scale and owners’ economics to help supercharge it – and Ultra Mobile – into the future,” T-Mobile CEO Mike Sievert said in a statement. “Over the long-term, we’ll also benefit from applying the marketing formula Mint has become famous for across more parts of T-Mobile. We think customers are really going to win with a more competitive and expansive Mint and Ultra.”
The actual price paid by T-Mobile will be based upon Ka’ena’s performance during certain periods before and after the closing and is subject to “working capital adjustments and other contractual reserves.”
The transaction, which is subject to the satisfaction of closing conditions, is expected to close later this year and be “slightly accretive” to T-Mobile’s core Adjusted EBITDA and free cash flow. T-Mobile does not currently expect the transaction to have any impact on the company’s 2023 guidance or its ongoing stock repurchase program.
Following the deal’s closing, Mint’s founders David Glickman and Rizwan Kassim will remain onboard at T-Mobile to manage the brands, which will generally operate as a separate business unit. Mint and Ultra will be “complementary” to T-Mobile’s other prepaid options, which include Metro by T-Mobile, T-Mobile’s own branded prepaid service and its Connect by T-Mobile brand.
“Our brands have thrived on the T-Mobile network, and we are thrilled that this agreement will take them even further, bringing the many benefits of 5G to even more Americans,” Glickman said. “This transaction validates our meteoric success and will unite two proven industry innovators committed to doing things differently in the wireless industry.”
In a video posted on Reynold’s Twitter account, Sievert confirmed that Mint would maintain its $15 per month pricing. Reynolds added that the company’s “borderline reckless messaging strategy would also remain untouched” and that its “nice to have a new dad.”
The latest business deal for Reynolds comes after he sold his Aviation Gin brand to British beverage company Diageo for $610 million in 2020.