Leap Pretties Itself Up With South Texas Joint Venture

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Leap Wireless (s leap) is teaming with Pocket Communications to expand its footprint in South Texas in an apparent effort to primp for potential dance partners as the move toward consolidation continues in mobile. The companies said today that Leap will control a new joint venture that will acquire both companies’ licenses and operating assets in markets including San Antonio, Laredo and the Rio Grande Valley. Leap will own a 76 percent stake in the venture and will buy some of Pocket’s South Texas assets for about $38 million in cash before the deal closes, then will contribute to the business with its own related assets.

Pocket, a regional flat-rate service provider that also operates a network in New England, claims 320,000 customers in South Texas while Leap’s Cricket provides prepaid service to about 400,000 users in the region and 5 million nationwide. The companies believe the move will result in additional contribution to Leap’s OIBDA (operating income before depreciation and amortization) in the range of $50-$60 million within two years.

Notably, the deal includes a provision that forces Pocket to sell its stake in the joint venture to Cricket should Leap change hands. That’s a scenario that’s increasingly likely given that Leap has hired advisers to explore a sale or merger in the face of an increasingly brutal prepaid market. A tie-up with MetroPCS (s pcs)  has been rumored recently, and the Wall Street Journal reported earlier this month that Leap had reached out to both AT&T (s t) and Verizon Wireless (s vz). So like a lonely girl hoping someone will ask her to dance, Leap is doing everything it can to make itself a little prettier as the industry continues to move toward consolidation.

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