Thursday October 30 11:31 AM EST
Company Press Release
Telegroup Announces Acquisition of PCS Telecom Inc.
FAIRFIELD, Iowa--(BUSINESS WIRE)--Oct. 30, 1997--Telegroup Inc. (NASDAQ:TGRP), a leading alternative provider of international
telecommunications services, acquired 60 percent of the Common Stock of, and a controlling interest in, PCS Telecom Inc. (''PCS'') for $1.3 million in cash
and 40,000 shares of unregistered common stock. PCS, based in Jupiter, Florida, is a leading provider of turnkey PC-based voice processing switches.
PCS has developed a flexible, proprietary switch which supports a broad range of enhanced telecommunications services including: prepaid and postpaid
calling cards, voice mail, conference calling, call forwarding, fax store and forward and prepaid wireless. PCS markets its switches to major
telecommunications carriers, resellers and equipment providers throughout the world. During 1996, PCS reported revenue of $3.6 million and net income of
$200,000.
''We believe that the global demand for enhanced telecommunications services will increase significantly in the near future,'' said Cliff Rees, Telegroup
President and Chief Executive Officer. ''Telegroup's goal is to become one of the leading global providers of enhanced telecommunications services to retail
and carrier customers in order to expand the value-added component of our service offering. We expect that these services will allow us to increase our
penetration of the small- and medium-sized business segment and to achieve higher gross margins that would be attainable with standard long distance
services.'' The PCS acquisition complements Telegroup's Intelligent Global Network (''TIGN'') expansion by securing the source of supply for enhanced
services switches which Telegroup intends to deploy with selected TIGN switch locations around the world.
Mark Balentine, Chief Executive Officer of PCS Telecom said ''Our new relationship with Telegroup was a natural next step in our growth. PCS Telecom
intends to expand its customer base by leveraging Telegroup's existing carrier relationships.''
Telegroup believes that PCS' existing and future customer base is a superior market for international, national and value-added wholesale opportunities.
Telegroup and PCS believe that synergistic marketing opportunities exist whereby PCS will provide enhanced service switches and Telegroup will provide
international long distance termination to the same carrier customers.
Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995: This press release contains statements which are not historical facts
and may be considered forward looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, such as statements regarding expected demands for telecommunication services and the future performance
of the company. Telegroup's actual results might differ materially from those projected by those statements due to numerous factors, including the company's
success in developing its business plan, attracting and retaining technical personnel, and demand for the technology provided by PCS.
Contact:
Telegroup Inc., Fairfield
Douglas A. Neish, 515/472-5000
E-mail: dneish@telegroup.com |
