Davis Polk & Wardwell LLP is advising Virgin Group on Virgin Mobile USA’s acquisition by Sprint Nextel. Virgin Group is Virgin Mobile USA’s largest shareholder with approximately 26 million shares on a fully diluted basis or 28.3% ownership. Under the terms of a definitive merger agreement approved by the boards of directors of both companies, Sprint will acquire Virgin Mobile USA for a total equity value of approximately $483 million, which includes the value of Sprint’s current 13.1% fully diluted ownership interest in Virgin Mobile USA. In addition, at closing Sprint will retire all of Virgin Mobile USA’s outstanding debt, which is $248 million net of cash and cash equivalents as of March 31, 2009.

Virgin Mobile USA, Inc., through its operating company Virgin Mobile USA, L.P., provides prepaid wireless services to millions of customers. Sprint Nextel offers a comprehensive range of wireless and wireline communications services. Following the closing of the transaction, Virgin Mobile USA will continue to license the Virgin Mobile USA brand from the Virgin Group.

The Davis Polk corporate team includes partner William H. Aaronson. Associate Stefan Quick is providing intellectual property advice. Partner Michael Mollerus and associate Michael Bretholz are providing tax advice. Partner James A. Florack is providing credit advice. All members of the Davis Polk team are based in the New York office.