[Pacific Gateway Exchange Signs Definitive Agreement to Acquire Retail Customers and Assets of the International Division of NOS Communications, Inc.]
Definitive Agreement, Acquisition to Close Over Next 60 to 90 Days $40 Million in Cash and Stock
Acquisition Is Accretive to Earnings Significant Synergy's From Network and Back-Office
BURLINGAME, Calif., Jan. 6 /PRNewswire/ -- Pacific Gateway Exchange, Inc., through its wholly owned retail subsidiary International Exchange Communications, Inc., announced today that it has signed a definitive agreement to acquire the retail customers and assets of the international division of NOS Communications, Inc. (NOS) for approximately $40 million in stock and cash, to be paid over 6 months. The asset base acquired by the Company is expected to generate over $11 million of revenue for the fourth quarter of 1999. The acquisition of NOS will be accretive to Pacific Gateway's EBITDA and earnings. The Company expects that the acquisition will be consummated over the next 60 to 90 days as regulatory approvals are attained. This acquisition is expected to significantly enhance the Company's retail revenue, billing and customer service platform.
"This acquisition fortifies our retail development plans in the US market and continues the growth in revenue from our marketing programs targeting the US ethnic communities," said Mr. Howard A. Neckowitz, President and CEO of Pacific Gateway. "NOS has achieved impressive growth in customers and revenue. We are thrilled with the convergent billing and back-office functions that we have acquired, complementing the operations that we have already developed."
With the marketing efforts of NOS targeting US based small office, home office ethnic communities and high volume international retail customers, this acquisition complements Pacific Gateway's existing marketing efforts and global network of customers, switch sites and operating agreements. NOS has around 75,000 pre-subscribed customers increasing the Company's customer base to around 300,000 pre-subscribed and dial around customers.
There are significant synergy's associated with bringing the customers on to Pacific Gateways network. Along with the customer base, Pacific Gateway acquired a customer service and call center with an ethnic focus and a billing function. The Company expects to achieve additional synergy's by integrating these back-office functions within its existing operations. Through the acquisition the Company has obtained significant back-office capabilities including convergent direct billing to allow for sales of emerging local and high speed Internet related services. This allows the Company to move even quicker in expanding its retail customer base and service offerings in both the US and offshore. |
