Pre-Paid Legal Services, Inc. Proposes to Acquire TPN, Inc.
Thursday September 24, 8:00 am Eastern Time
Company Press Release
ADA, Okla.--(BUSINESS WIRE)--Sept. 24, 1998--Pre-Paid
Legal Services, Inc. (ASE:PPD) (''Pre-Paid''), today announced
the execution of a definitive agreement to acquire TPN, Inc. d.b.a.
The Peoples Network, a Dallas based marketing company. Under
the agreement, TPN will merge into Pre-Paid in a tax-free
exchange of 1,000,000 shares of Pre-Paid common stock. Since
its inception in 1994, TPN has marketed personal development
products and services together with PRIMESTAR(R) satellite
subscription television service to its members through a network
marketing sales force. TPN presently has a sales force of
approximately 30,000 it considers active. TPN delivers its
personal development products and services to its sales force and
its subscribers via its own full time channel known as the
''SUCCESS CHANNEL'' on the PRIMESTAR(R) digital
satellite network.
The acquisition has received all necessary corporate approvals.
Closing is expected to occur in the next few days as soon as
Pre-Paid receives formal confirmation from its accountants that
the acquisition will quality as a ''pooling of interests'' for financial
reporting purposes.
Harland C. Stonecipher, Pre-Paid Chairman and Chief Executive
Officer, commented: ''The acquisition of TPN will be an excellent
addition to our organization that is expected to significantly
increase the size and effectiveness of our sales force through the
integration of the TPN sales force and by greatly enhancing our
ability to communicate with the combined sales force via the full
time, 24 hours per day, 7 days a week ''SUCCESS CHANNEL.''
We expect to utilize this powerful communications platform for
recruiting of new and additional sales associates, sales training,
motivation, personal development and product sales. In addition,
legal service information can be made available via the full time
''SUCCESS CHANNEL'' to our Pre-Paid Legal Services
members. While this is our first acquisition, it is strategically
notable because it represents a valuable long-term
communications platform for our organization's future growth and
expansion. The ability to communicate with people in their living
rooms via digital satellite broadcasting technology will further our
immediate recruiting and training of new and additional sales
associates as well as existing associates. It positions us not only
to continue growing our core business of legal service plans, but
also better positions us for other possible accretive acquisitions as
a part of our strategy to build a high-performance legal services
organization and to increase shareholder value.''
Jeff Olson, TPN Chief Executive Officer, said: ''Never in the
history of network marketing have two companies representing
such quality products come together. The combined sales force
allows for a significant opportunity to create the most explosive
sales opportunity seen in network marketing in recent years''.
Olson further stated ''the synergy created by this merger
substantially exceeds the simple sum of the two organizations.
The attributes of both entities gives each sales force superior
tools and products to impressively enhance their sales activity.''
''This proposed agreement represents a significant distribution
channel for PRIMESTAR(R)'', said Chris Sophinos, Senior Vice
President of Sales and Distribution for PRIMESTAR(R). ''The
combination of Pre-Paid's sales force and membership base
combined with that of TPN represents a large customer
expansion opportunity for PRIMESTAR(R).''
Prior to the merger, Pre-Paid had 22.5 million shares of common
stock outstanding and the closing price as of September 23, 1998
was $29.50 per share. The common stock of TPN is not publicly
traded.
The TPN transaction is not expected to have a significant impact
to Pre-Paid's 1998 third quarter earnings.
Pre-Paid Legal Services develops, underwrites and markets
legal service plans nationally. The plans provide for or reimburse
legal service benefits, including unlimited attorney consultation,
will preparation, traffic violation defense, automobile-related
criminal charges, letter writing, document preparation and review
and a general trial defense benefit.
Launched in 1994 as America's first digital satellite entertainment
service, PRIMESTAR has received the highest ranking among
satellite and cable television subscribers in the J. D. Power and
Associates 1997 Cable/Satellite Customer Satisfaction Study
(SM). This study ranks PRIMESTAR at the top in overall
customer satisfaction, above all major satellite and cable
providers nationwide.
This news release contains comments or information that
constitute forward-looking statements (within the meaning of the
Private Securities Litigation Reform Act of 1995), which involve
significant risks and uncertainties. Actual results may differ
materially from the results discussed in the forward-looking
statements. Factors that might cause such a difference include,
but are not limited to: expected cost savings from a merger
cannot be fully realized or realized within the expected time
frame; revenues following the merger are lower than expected;
competitive pressures among other network marketing
companies increase significantly; costs or difficulties related to
the integration of the business of the organizations are greater
than expected; general economic conditions, either nationally or
in states in which the combined company will be doing business,
are less favorable than expected; and legislation or regulatory
changes adversely affect the businesses in which the combined
company would be engaged.
For more information visit the Pre-Paid web site at
www.pplsi.com and the TPN web site at www.tpn.com.
Contact:
Pre-Paid Legal Services Inc.
Melanie Lawson, 580/436-1234
or
TPN, Inc.
Steve Kovac, 972/860-0400 |
