Sprint has agreed to acquire Virgin Mobile USA for $483 million. The takeover will strengthen Sprint’s growing prepaid mobile phone business, as they plan to merge Virgin Mobile and Sprint’s Boost Mobile business. Sprint says both businesses presently appeal to different audiences.

The carrier plans to make administrative cuts and Virgin Mobile USA stockholders will receive shares of Sprint common stock with a 10-day average closing price equal to $5.50 per Virgin share. Public stockholders own 43.3% of Virgin Mobile shares. Sprint is expected to pay $50 million at closing, and $12.7 million for a licensing deal until 2021. Both companies foresee the deal to close late this year or early 2010.

All $248 million of Virgin Mobile’s outstanding debt in the US will be retired upon closing the deal and Virgin Mobile USA intends to continue licensing the brand from the Virgin Group. According to Sprint CEO Dan Hesse, the deal will position Sprint for even greater success in the prepaid wireless segment. He added that prepaid is growing at an unprecedented rate.