Virgin Mobile USA narrows IPO price target

Virgin Mobile USA Inc. again adjusted the price of its proposed initial public offering, and outlined the financial details of the plan.
According to documents filed with the Securities and Exchange Commission, Virgin Mobile plans to offer 27.5 million shares for between $15 and $17 apiece, to raise as much as $467.5 million.
The MVNO initially filed for a $100 million IPO in May, but in July amended its filing to $500 million.
Virgin said that it had about 4.83 million customers at the end of June, up from 4.57 million at the end of December 2006. The company estimated that it serves about 15% of the pay-as-you-go market, and that about half of its customer base is over the age of 35.
For the first six months of 2007, the company had profits of $26.5 million on revenues of nearly $670 million. Virgin reported average revenue per user of about $21.68 for the six months ended June 30, 2007, up slightly from $21.61 during the first six months of 2006. The company had about $522 million in total debt as of June 30.
Virgin estimated that it would receive $375.6 million from the IPO after offering expenses and underwriting discounts, assuming a share price of $16.
The MVNO said it planned to use part of the proceeds from the IPO to pay down debt, as well as to buy out part of Sprint Nextel Corp.’s ownership of the company. The rest of the funds will go toward general corporate and other purposes.