PR NEWSWIRE) DJ: DCI Signs LOI to Acquire $40 Million Locus Corporation
DJ: DCI Signs LOI to Acquire $40 Million Locus Corporation
STRATFORD, Conn., May 19 /PRNewswire/ -- DCI Telecommunications, Inc. (OTC
Bulletin Board: DCTC), an international supplier of telecommunications
services, announced today the signing of a letter of intent to acquire
privately owned Locus Corporation, of Fort Lee, New Jersey. Locus is a
global provider of prepaid phone cards, international call back, long
distance service and Internet service. The transaction, which involves a
combination of cash and stock, is valued at $25 million.
Since its founding in 1989, Locus has been moving towards becoming a global
provider of integrated telecommunication services, building on its successes
as a reseller of telephone traffic. By entering into the Internet and
wireless market, it has furthered its technical capability, expanded the
physical traffic network and customer base as well as improve profitability.
Locus distributes prepaid phone cards in 35 states through more than 2,000
retail outlets. Its Customer Service Center is staffed with bilingual or
trilingual representatives 24 hours a day. CallBack service is provided to
Argentina, Brazil, Thailand, Sweden and Korea. The long distance service
that Locus provides, targets small business customers in Asian communities.
Additionally, Internet service is available in New York and New Jersey and
prepaid cellular service has just been launched in the New York metro area
as well.
Locus is profitable and is at a current run rate of $40 million in revenues.
It has experienced rapid growth over the past five years. Revenues have at
least doubled each year since 1993. It is expected that 1997 revenues will
triple 1996 figures.
Jason Chon, founder and president of Locus said, "In order to maintain this
exciting momentum, we are adding new services to the product portfolio,
investing in network expansion and developing new distribution channels. As
part of DCI we will be able to accelerate this program."
DCI's chief operating officer, Larry Shatsoff stated, "Locus is a very well
managed company with its own state of the art switching systems. These
systems will not only be invaluable to sustaining the phenomenal growth of
Locus, but also for providing prepaid platforms which can be used by the
other DCI subsidiaries."
DCI recently finalized the acquisition of Edge Communications, a
Maryland-based prepaid phone card company, in a transaction valued at $8
million. With the rapid growth of Edge, as evidenced by a doubling of its
revenues, coupled with a lack of a strategic fit for the company, DCI was
forced to terminate acquisition negotiations with Payless Communications.
The signing of a letter of intent with Locus is a continuation of DCI's
growth plan. This new deal will expand DCI's current infrastructure. It
not only adds hardware that can be utilized by other DCI subsidiaries, but
it helps to extend DCI's reach to further cover the globe.
DCI Telecommunications is an international supplier of telephone services,
including long distance service, prepaid telephone cards and Internet
products. It has an extensive distribution network throughout North
America, Europe and the Far East and owns telephone switching facilities in
Canada, the United Kingdom, Spain and Denmark. DCI recently reported sales
of $6.2 million and $1.3 million in profit (13 cents per share), for the
first nine months of fiscal 1998 (which does not include Edge
Communications), and has 12 operating facilities, serving customers in eight
countries.
Safe Harbor Statement under the Private Securities Litigation Act of 1995;
The statements which are not historical facts contained in this press
release are forward-looking statements that involve certain risks and
uncertainties including but not limited to risks associated with the new
uncertainty of future financial results, additional financing requirements,
development of new products, regulatory approval processes, the impact of
competitive products or pricing, unpredictability of patent protection,
technological changes, the effect of economic conditions and other
uncertainties detailed in the company's filings with the Securities and
Exchange Commission.
/CONTACT: Craig K. Murphy, Director, Investor Relations of DCI
Telecommunications, Inc., 203-380-0910, ext. 301, or dcitel@aol.com/
09:01 EDT
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