HitCom Closes Channel Telecom Acquisition
Rick & all,
biz.yahoo.com
Monday June 1, 9:29 am Eastern Time
Company Press Release
Simultaneously Refinances Corporate Debt to Improve Current Ratio by 73 Percent
ST. LOUIS--(BUSINESS WIRE)--June 1, 1998--HitCom Corp. (Nasdaq OTC:HICO - news), a facilities-based telecommunications company with headquarters in St. Louis, Monday announced that it has closed its acquisition of Channel Telecom, Canada's fourth largest facility-based provider of prepaid phone cards.
HitCom signed a definitive agreement with Channel in February and has now officially closed the transaction that exchanges approximately 4.2 million shares of HitCom's common stock and a note for 100 percent of Channel's outstanding stock. The effective date of the transaction is Jan. 1, 1998.
The Channel acquisition advances HitCom's three-year growth strategy to become a leader in developing and provisioning enhanced communications services. The acquisition is also consistent with HitCom's overall strategy to expand, in part, through strategic acquisitions which increase HitCom's market share, enhance its product mix, increase revenues and augment the company management team and capabilities.
Rajan Arora, co-founder of Channel Telecom and current HitCom president & CEO, elaborated, ''This acquisition continues to build on HitCom's turnaround in 1997 and reinforces our corporate infrastructure and capabilities to successfully compete in the evolving telecommunications marketplace.
''As 1998 unfolds, I'm confident the results of this acquisition and the synergies it has created will become very evident to HitCom shareholders and the public.''
Arora continued, ''We are very enthusiastic about the company's potential for rapid growth as we continue to implement our aggressive growth strategy.''
The Channel acquisition allows the two companies to connect their existing networks together, creating an enhanced call switching facility that gives HitCom and Channel the ability to reduce its current transport costs while attracting larger clients and increasing international business.
At the same time HitCom announced that it has secured a credit facility with TheBANK of Edwardsville, a leading, locally owned regional bank in southwestern Illinois, to refinance the company's short-term debt structure.
''One of our goals since the first of this year has been to improve our balance sheet by reducing the company's dependence on short-term financing,'' said David B. Parks, HitCom chief financial officer.
''The term debt credit facility allows HitCom the flexibility to eliminate several short-term payables and notes. As a result of our new financial relationship, the company was able to improve its current ratio from .22-to-1 to .38-to-1 representing an improvement of 73 percent.''
According to Roger Huber, TheBANK of Edwardsville, vice president: ''We have had a strong relationship with HitCom's management for several years now. We continue to be enthusiastic about building on our past relationship as well as contributing to the growth and expansion of such a dynamic organization.''
HitCom's other short-term financial goals include equity financing, internal sales growth, acquisitions and a Nasdaq Small Cap listing.
About Channel
Channel Telecom Inc., with headquarters in Toronto, has experienced significant growth over the past four years, recently becoming Canada's fourth largest facility-based provider of prepaid calling cards. The company's branded cards, Channel PhonePass and PhoneCash, are distributed through a broad retail distribution base unsurpassed in Canada.
About HitCom
HitCom, with headquarters in St. Louis, is a facilities-based telecommunications company that provides enhanced communication services and technologies to businesses and consumers in the United States and Canada.
Specifically, HitCom focuses on designing, developing and marketing Interactive Voice Response/Voice Processing Services, Prepaid/postpaid PhoneCards and PhoneCard Platform Services, Internet Connectivity Services, IP Telephony Services and other Emerging Communications Services.
HitCom markets its products and services through its subsidiaries One Plus Marketing Inc. and Channel Telecom. HitCom can be found on the World Wide Web at www.hitcom.com.
Statements contained in this news release regarding expected financial results and other planned events are forward-looking statements, subject to uncertainties and risks, including, but not limited to, the demand for HitCom's products and services, and the ability of the company to successfully implement its strategies, each of which may be impacted, among other things, by economic, competitive, or regulatory conditions.
best regards
CROSSY |
