Sprint Nextel announced on Tuesday that it will snap up Virgin Mobile’s operations in the USA at a valuation of $ 483 million in a mix of equity and cash deal.

Sprint currently holds 13.1 % stake in Virgin Mobile USA. Other stakeholders in the MVNO include Virgin Group, SK Telecom and shareholders through the listing of the company.

“This acquisition will strengthen Sprint’s position in the growing prepaid segment by bringing together under one umbrella the iconic Virgin Mobile brand with Sprint’s successful Boost Mobile business. These complementary prepaid brands, each with a distinctive offer, style and appeal to different customer demographics, will continue to serve existing and prospective customers following the completion of the transaction,” said a company statement.

Sprint also said that it plans to retire all of Virgin Mobile’s debt amounting to $ 205 million by September 30.

Sprint offered the price based on Virgin’ Monday price on stock exchange of $ 4.21 per share. Sprint is offering Virgin 31 % premium on this price i.e. $ 5.50 per share.

Post announcement, shares of Virgin Mobile surged 23 % to $ 5.21. Shares of Sprint remained almost flat.

“The acquisition of Virgin Mobile USA positions Sprint for even greater success in the prepaid wireless segment,” said Dan Hesse, Sprint Nextel president and CEO. “Prepaid is growing at an unprecedented rate with consumers keenly focused on value. Virgin Mobile is an iconic brand in the marketplace that will complement our Boost Mobile brand.”

Sprint is perceived to be catering to low-end subscribers in the country with a predominantly prepaid subscriber base. Virgin Mobile too is considered to be falling under similarly category.

Earlier in July, Virgin Mobile Canada had similarly offloaded its stake to Bell Canada. Virgin Mobile is also present in India in tie-up with Tata Teleservices.