NEWS ALLSTAR ACQUISITION IS CLOSED
Wednesday April 28, 9:55 am Eastern Time
Company Press Release
International FiberCom, Inc. Acquires All Star Telecom, Inc.
Adds Key Capacity in Booming Deployment of New Fiber On the West Coast
PHOENIX--(BUSINESS WIRE)--April 28, 1999--INTERNATIONAL FIBERCOM, INC. (NASDAQ: IFCI - news) and its Chairman and CEO Joseph P. Kealy today announced today that it has closed on the acquisition of privately owned All Star Telecom, Inc. All Star, which has a June 30 fiscal year, reported (unaudited) sales of $15.6 million and net income of $500,000 for the six months ended December 31, 1998. All Star employs nearly 400 people.
The initial consideration called for the issuance of 592,857 restricted shares of common stock and the payment of $3,850,000 in cash, for a total of approximately $8 million. Additional contingent proceeds (up to $13.5 million) may be payable if All Star meets certain pretax targets over the next three years. To achieve the full earn-out, All Star needs to earn $21.375 million or more on a pretax basis over that period. Future contingent payments may be in cash or stock, except that over 40% of all proceeds must be paid in stock. Stock issued in 1999 has limited registration rights after six months.
All Star is a Sacramento based, infrastructure development company similar to IFCI subsidiaries Riley and Kleven. It operates throughout the western United States with major customers including Boeing (BA), Comcast (CMCSA), GTE, IXC Communications (IIXC), MCI-WorldCom (WCOM), Pacific Bell (SBC) and Williams Communications (WMB). It will operate as a wholly owned subsidiary of IFCI.
Joseph P. Kealy, CEO and Chairman stated, ''All Star, with its sister companies Riley and Kleven, gives us critical mass in infrastructure development in the western United States. With Compass Communications, we have had the engineering capability to take on national contracts. All Star gives us the additional resources needed to take on major western design-build contracts in their entirety. Customers want this, and we will respond.''
This press release contains certain forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements, by their very nature, include risks and uncertainties. Accordingly, the Company's actual results could differ materially from those discussed in this release. A wide variety of factors could cause or contribute to such differences and could adversely impact revenues, profitability, cash flows and capital needs. Such factors, many of which are beyond the control of the Company, include the following: the Company's success in obtaining new contracts; the volume and type of work orders that are received under such contracts; the accuracy of the cost estimates for projects; the Company's ability to complete its projects on time and within budget; levels of, and ability to collect accounts receivable; availability of trained personnel and utilization of the Company's capacity to complete work; the Company's ability to complete proposed acquisitions and, upon their completion, to integrate the acquisitions into its organization and manage its growth; competition and competitive pressures on pricing; and economic conditions in the United States and in the regions served by the Company. A more complete listing of cautionary statements and risk factors is contained in the Company's report on Form 10-KSB for the year ended December 31, 1998 filed with the Securities and Exchange Commission.
|
