T-Mobile US Inc. announced on Wednesday it would acquire Mint Mobile parent Ka’ena Corp. in a $1.35 billion bid. Mint is partially owned by actor Ryan Reynolds and is a budget service provider.
In a market that is getting more competitive, T-Mobile is now targeting pay-as-you-go customers, which shows good growth potential as people seek lower-cost offerings and avoid hefty monthly bills for their phone service.
T-Mobile’s purchase of Ka’ena will give it access to Mint, Ultra Mobile, and wholesaler Plum. The brands, which already use T-Mobile for their network, will be run as a separate business unit.
The U.S. wireless carrier said Mint and Ultra Mobile complement its existing prepaid services, Metro by T-Mobile, T-Mobile branded prepaid, and Connect by T-Mobile.
The move is expected to boost T-Mobile’s business as rivals Verizon and AT&T have caused an increased churn rate, which refers to the percentage of customers who stop using a service.
The acquisition deal will be 39 percent in cash and 61 percent in stock, with the final purchase price set to be decided by Ka’ena’s performance during specific periods before and after the deal’s closing, that is expected later this year.
“Over the long term, we’ll also benefit from applying the marketing formula Mint has become famous for across more parts of T-Mobile,” said Mike Sievert, Chief Executive Officer of T-Mobile.
Mint is known for its marketing tactics that often feature part-owner Reynolds. At the onset of the pandemic in 2020, the “Deadpool” star left a voicemail informing users that the company had given them unlimited free data.
Mint founders David Glickman and Rizwan Kassim will stay on at T-Mobile after the transaction is complete to manage the brands. Reynolds, meanwhile, will remain in his creative role for Mint.
Reynolds’ portfolio also includes British soccer club Wrexham and Aviation American Gin, which was sold to Diageo for about $610 million in 2020. The actor, however, maintains an “ongoing ownership interest” in Aviation Gin.
“I never dreamt I’d own a wireless company, and I certainly never dreamt I’d sell it to T-Mobile,” Reynolds said on Twitter. “Life is strange and I’m incredibly proud and grateful.”
T-Mobile, based in Bellevue, Washington, became one of the country’s largest cellphone service carriers in 2020 after buying rival Sprint.
T-Mobile is owned by Telekom Deutschland GmbH, based in Bonn, Germany.
Reuters and The Associated Press contributed to this report.