XFONE SIGNS AGREEMENT AND
PLAN OF MERGER
WITH
WS TELECOM INC.
Acquisition Establishes xfone's
Presence in the United States.
Adds Business with 2003 Revenues of $5 Million
June 1, 2004
JACKSON, Miss. and LONDON - (BUSINESS WIRE) - June 1, 2004 - xfone, Inc. announced today that on May 28, 2004 it entered into an Agreement and Plan of Merger which sets forth the terms and conditions of a proposed merger of WS Telecom Inc., d/b/a eXpeTel Communications, a corporation organized under the laws of the State of Mississippi, into xfone USA, Inc., a wholly-owned subsidiary of xfone, Inc. WS Telecom Inc. is a telecommunications service provider based in Jackson, Mississippi. The merger includes WS Telecom’s two wholly-owned subsidiaries: eXpeTel Communications, Inc. and Gulf Coast Utilities, Inc. The first stage of the transaction will be the implementation of a Management Agreement effective July 1, 2004. Completion of the merger is subject to the satisfaction of certain conditions, including receipt of regulatory approvals.
During 2003, WS Telecom generated revenues of approximately $5 million. WS Telecom provides residential and business customers with high quality local and long distance telephone services, as well as cable television and high speed Internet to planned and multi-dwelling apartment communities. WS Telecom’s integrated multimedia services, combining digital voice, data and video over third-generation broadband infrastructure, are available to customers on a single itemized bill.
Guy Nissenson, President and CEO of xfone, said: "We are extremely pleased with this opportunity to establish xfone’s presence in the U.S. telecom market. We hope that our business in the United States will open the door to further expansion, both internally and through the pursuit of additional acquisition opportunities. We found in WS Telecom the key ingredients that we sought in a target company: a capable and experienced management team, a strong recurring revenue base driven by both residential and business customers, a comprehensive service offering including local, long distance, wireless and Internet, and state-of-the-art facilities with an advanced infrastructure. Additionally, WS Telecom’s business model lends itself well to our current strategy. We believe that we will be able to leverage the synergies of the two companies, resulting in joint interconnect agreements, as well as the sharing of technology and systems."
Wade Spooner, Chairman and CEO of WS Telecom commented: "We are excited about the prospects of becoming a part of xfone. We are confident that the synergistic business plans, coupled with the strong management teams of the two companies will create an exceptional opportunity to continue toward our strategic growth initiatives. Additionally, new and existing customers in our service areas will benefit from the traditional and next-generation service offerings that we will continue to make available. We are looking forward to joining the xfone management team to support our aggressive expansion plans."
For 100% ownership of WS Telecom, Inc., xfone, Inc. will be required to issue a number of restricted shares of its common stock with a market value of $2,200,000, determined by using the weighted average price of xfone, Inc’s common stock for the ten trading days preceding the trading day immediately prior to the date xfone, Inc. and WS Telecom, Inc. will enter into a Management Operating Agreement. The Merger Agreement further provides that: (a) such weighted average price will in no event be less than $3.30 per share or greater than $4.30 per share; (b) xfone, Inc. will issue a number of warrants with a value of $1,300,000, based on the #063770 Scholes option - pricing model.
Mr. Nissenson added: "Concurrent with this exciting merger in the US, we recently applied for a license to establish an international telecommunications service business in the $330 million Israeli market. These new ventures represent a significant step toward the execution of our business plan. We are working diligently toward further development of xfone according to our successful business model and implementation of our long-term strategy, focusing on growth and profitability, utilizing automation and maintaining low overhead."
The Oberon Group is acting as exclusive advisor to xfone regarding this transaction.
About XFONE, Inc.
A U.S.-domiciled corporation, XFONE, Inc. is an international voice, video and data communications services provider with operations in the United Kingdom, the United States and Israel that offers a wide range of services, which include: local, long distance and international telephony services; prepaid and postpaid calling cards; cellular services; Internet services; messaging services (Email/Fax Broadcast, Email2Fax and Cyber-Number); and reselling opportunities. The Company serves customers across Europe, Asia, North, Central and South America, Australia and Africa.
This press release contains forward-looking statements.
The words or phrases "should," "would
be," "will allow," "intends to,"
"will likely result," "are expected to,"
"will continue," "is anticipated,"
"estimate," "project," or similar
expressions are intended to identify "forward-looking
statements." The Company's financial results reflected
above should not be construed by any means as representative
of the current or future value of its common stock.
All information set forth in this press release, except
historical and factual information, represents forward-looking
statements. This includes all statements about the company's
plans, beliefs, estimates and expectations. These statements
are based on current estimates and projections, which
involve certain risks and uncertainties that could cause
actual results to differ materially from those in the
forward-looking statements. These risks and uncertainties
include issues related to rapidly changing technology
and evolving standards in the industries in which the
Company and its subsidiaries operate; the ability to
obtain sufficient funding to continue operations, maintain
adequate cash flow, profitably exploit new business,
and license and sign new agreements; the unpredictable
nature of consumer preferences; and other factors set
forth in the Company's most recently filed annual report
and registration statement. Readers are cautioned not
to place undue reliance on these forward-looking statements,
which reflect management's analysis only as of the date
hereof. The Company undertakes no obligation to publicly
revise these forward-looking statements to reflect events
or circumstances that arise after the date hereof. Readers
should carefully review the risks and uncertainties
described in other documents that the Company files
from time to time with the Securities and Exchange Commission.
| For More Information, Please Contact: |
 |
| U.S.
IR Contact |
John G. Nesbett/Jennifer Belodeau
Institutional Marketing Services (IMS)
Phone: 1.203.972.9200.
E-mail: jnesbett@institutionalms.com |
|
| Xfone Contact |
|
Niv Krikov
Chief Financial Officer
Phone: 1.806.771.1181
E-mail: niv@xfone.com
5307 W. Loop 289
Lubbock, TX 79414-1610
|
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