eGlobe Announces Agreement to Merge With Trans Global Communications
Combined Pro-forma Run Rate of $140 Million
$90 Million Transaction Value
WASHINGTON, Sept. 27 /PRNewswire/ -- eGlobe, Inc. (Nasdaq: EGLO) today announced that it reached an agreement to merge with Trans Global Communications, Inc. (www.tgc.net), a leading provider of international voice and data services to carriers in several markets around the world. Trans Global, a private company, anticipates 1999 revenues of more than $100 million, with positive EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization). The Letter of Intent signed by the companies values Trans Global equity at approximately $80 million, which will be paid in eGlobe stock at closing. eGlobe will assume approximately $10 million of Trans Global's outstanding current liabilities.
Trans Global has moved aggressively into direct route and Voice over IP (VoIP) services over the past year. Its emerging VoIP network structure in the Middle East complements the eGlobe VoIP network structure in Asia Pacific and Latin America. The combination positions eGlobe among the leaders in the VoIP segment: among such leading companies as Net2Phone, Deltathree.com, Inc., ITXC, Corp. and iBasis, Inc.
After the merger, three Trans Global representatives will join the eGlobe Board of Directors -- Arnold Gumowitz, Chairman of Trans Global, Gary Gumowitz, President of Trans Global, and John Hughes, Trans Global General Counsel. All the senior members of the Trans Global management team will occupy senior positions in the combined company. Arnold Gumowitz will become Co-Chairman of the combined company with Christopher Vizas, Chairman and CEO of eGlobe. Mr. Vizas will continue as Chief Executive Officer of the Company.
Mr. Vizas said, "This combination creates a powerful new company. The merger with Trans Global leapfrogs the eGlobe strategy forward two years. Combined, we will have a substantially expanded customer base and immediate opportunities for increasing the offering of high margin enhanced telecommunications services. In particular, we will be uniquely positioned to extend the eGlobe "telephone portal" services throughout the world. Moreover, we will have the volume of traffic necessary to more cost effectively expand the global IP infrastructure."
Arnold Gumowitz, Trans Global Chairman, commented, "The combination with eGlobe creates a unique new company with an unprecedented opportunity. We will create a toll-quality global IP network supplying premium enhanced communications services: we have the customers, we have the network, and we will have the services. And, we have significant opportunities to expand with customer partners in choice markets around the world."
According to Gary Gumowitz, President/CEO and founder of Trans Global, "With the two companies coming together we believe that we will have the most extensive international VoIP network in the world -- a network that the creativity and capabilities of the new company can exploit to become a major independent enhanced service provider. Trans Global customers are seeking new, higher value, enhanced services, including telephone portal, unified messaging and calling card services; combined with eGlobe, we will be well positioned to our customers' needs."
The transaction is subject to definitive documentation, completion of due diligence, and receipt of necessary approvals, including approval of shareholders. The companies expect to hold shareholder's meetings and conclude the merger in December, 1999 or January, 2000.
Christopher Vizas and Arnold Gumowitz will host a conference call to discuss the merger beginning at 11:00 a.m. Eastern, 8:00 a.m. Pacific on Tuesday, September 28, 1999. To access the conference call please dial 212-896-6089. A replay of this call will be available from 1:00 p.m. Eastern, 10:00 a.m. Pacific beginning September 28, 1999 until 7:00 p.m. Eastern, 4:00 p.m. Pacific on October 1, 1999. To access the replay please dial 800-633-8284 and enter reservation number 13236761.
eGlobe is a leading supplier of global telecommunications and information services, including Voice over IP, Telephone Portal and Unified Messaging Services, other international Internet and inter-networking services, and calling card services, along with related validation, billing and payment systems. eGlobe operates in partnership with telephone companies and ISPs around the world. Through its World Direct network, eGlobe originates traffic in 90 territories and countries and terminates anywhere in the world. eGlobe provides its services principally to large national telecommunications companies, to ISPs and Portals, and to financial institutions.
Trans Global Communications, Inc. is a privately held corporation founded in 1995 with its headquarters located in New York City. Currently Trans Global derives its revenue from the resale of international minutes and the sale of services using its own facilities. In the third quarter of 1999 Trans Global has launched calling card products targeted at the international travel and affinity markets. Through a combination of IXC and foreign post, telephone & telegraph (PTT) agreements, Trans Global Communications has established a facilities based network of high quality and reliability. Trans Global's network is accessible via points-of-presence (POP's) in New York, Los Angeles, San Francisco, Miami, London and Cairo. The Company can transport and terminate voice, fax, and data to any country with real-time billing through its main switching centers in New York and London.
Certain statements in this news release are "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward looking statement. Factors that impact such forward looking statements include, among others, the ability of the Company to attract additional business, the ability of the Company to successfully integrate acquisitions and mergers, complete software development and offer new products, changes in expectations regarding restructurings, including tax liabilities and reductions in cost, possible changes in collections of accounts receivable, risks of competition, price and margin trends, changes in worldwide general economic conditions, changes in interest rates, currency rates and worldwide competition.
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SOURCE: eGlobe, Inc.
CONTACT: Allen Mandel, Senior VP, Corporate Affairs of eGlobe, Inc., 800-688-0092; or John Heilshorn, 212-838-3777, or john@lhai.com, or Kris Otridge, 415-433-3777, or kris@lhai-sf.com, both of Lipp |
