Brian,
If you re-read this news release, you will find that
towards the bottom it discusses the termination of
the Payless deal. Have a good day....
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. |
