The News: T-Mobile announced that it has entered into a definitive agreement to acquire Ka’ena Corporation and its subsidiaries and brands: Mint Mobile, a successful direct-to-consumer (D2C) prepaid wireless brand in the U.S.; Ultra Mobile, a unique wireless service offering international calling options to communities across the country; and wholesaler Plum. Read more from T-Mobile.
T-Mobile to Acquire and Turbocharge Mint Mobile and Ultra Mobile and Yes, Reynolds Will Stay Around
Analyst Take: In news that pretty much proves that Ryan Reynolds is the “it” guy when it comes to — well, pretty much anything, news that T-Mobile is acquiring Ka’ena Corporation and its brands Mint Mobile and Ultra Mobile was today’s big news in the mobile world. Reynolds has largely been the face of the brand and holds a 25% ownership interest, and T-Mobile’s acquisition comes at a price tag of a cool $1.35 billion in a cash (39%) and stock (61%). Note that the price to be paid by T-Mobile will be based upon Ka’ena’s performance during certain periods before and after the closing.
Mint Mobile, a direct-to-consumer prepaid wireless brand, and Ultra Mobile, a wireless service that offers international calling options, and wholesaler Plum are part of this deal, and the goal of T-Mobile here will be to turbocharge growth for all. Mint/Ultra founders David Glickman and Rizwan Kassim plan to remain on board and manage the brands, and it’s expected that they will continue to operate as a separate business unit. And not to worry, Reynolds plans to continue on in his role as the creative part of the equation.
Through the acquisition, T-Mobile acquires the brands’ sales, marketing, digital, and service operations, and 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. T-Mobile will also be able to leverage Mint’s well-established digital D2C marketing expertise in order to reach new customer segments. The Mint and Ultra brands are complementary to the company’s current prepaid service offerings Metro by T-Mobile, T-Mobile branded prepaid, and Connect by T-Mobile.
Why Mint Mobile and Ultra Mobile?
So why would T-Mobile be interested in Mint Mobile and Ultra? That’s an easy one. Mint’s successful DTC business has operated exclusively on the T-Mobile network and Ultra’s calling plans and Plum’s wholesale operations fit perfectly into the T-Mobile equation.
Mint has benefited from Reynolds’ celebrity and his ridiculous (as in ridiculously amazing) sense of humor to muscle into the very crowded wireless business as a serious low-cost competitor. Reynolds owns about 25% of the company, which means he stands to gain about $300m in the deal overall. Not Deadpool money, but not bad.
In a video that appeared on Twitter today announcing the deal, Reynolds joked: “T-Mobile has assured me that our incredibly improvised and borderline reckless messaging strategy will also remain untouched.” That’s what I call ”The Reynolds factor,” charm plus scrappiness plus self-deprecating wit combined with an attractive offering — whether that’s low-cost mobile, gin, or football — is where the magic happens. Here’s a look at the video:
T-Mobile CEO Mike Sievert said that the company is looking forward to not only helping propel the success of these brands forward at a more rapid pace, but they’re also looking forward to the benefit they’ll derive from Mint’s clever marketing. This “personality” that Reynolds has helped establish for the brands fits nicely in with T-Mobile’s own “Un-carrier” brand identity which has helped differentiate it from the other players in the space. Innovators attract innovators, and that’s clearly at work here.
Wrapping up, through this acquisition T-Mobile will be able to use its supplier relationships and distribution scale to help Mint Mobile, Ultra Mobile, and Plum continue to grow and offer competitive pricing and greater device inventory to more U.S. consumers. For T-Mobile, the benefit will be in being able to leverage Mint’s successful digital direct-to-consumer marketing strategies across T-Mobile. Consumers will get a more competitive and expansive Mint Mobile and Ultra Mobile.
Disclosure: Futurum Research is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum Research as a whole.
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Image Credit: T-Mobile
Author Information
Shelly Kramer is a serial entrepreneur with a technology-centric focus. She has worked alongside some of the world’s largest brands to embrace disruption and spur innovation, understand and address the realities of the connected customer, and help navigate the process of digital transformation.
