PAETEC announced that it has signed a definitive agreement to acquire assets from FTS including the Leap RevChain billing system
FAIRPORT, N.Y. and Herzliya, Israel - December 10, 2010 (Print-friendly PDF file)
PAETEC Holding Corp. (NASDAQ GS: PAET), a FORTUNE 1000 company, and FTS Ltd. (LSE: FTS), a global provider of billing, customer care and policy control solutions for communications and content service providers, announced that PAETEC's wholly-owned subsidiary, PAETEC Software Corp. (PAETEC Software) has signed a definitive agreement to acquire the entire assets and assume certain liabilities of Formula Telecom Solutions, Inc., a wholly-owned subsidiary of FTS, in a $13 million all-cash transaction. The purchase is expected to close in late December of 2010.
PAETEC is a leading national communications carrier in the United States that provides voice and data solutions to business-class customers. FTS Inc.'s Leap RevChain is considered one of the strongest billing platforms in the telecommunication industry and has been PAETEC's primary billing system since its inception in 1998. Upon the closing of this transaction, the Leap RevChain billing system will be the heart of the new RevChain Solutions division of PAETEC Software. The RevChain Solutions division expects to continue investing in the development of high performance invoicing solutions for businesses, institutions and carriers.
"We've been using the Leap RevChain billing system for over 12 years. Acquiring the system and its loyal development and support teams not only protects our supply chain, but also offers us an opportunity to continue to innovate the product and grow revenue to the benefit of all Leap RevChain customers," said PAETEC Executive Vice-President and Chief Information Officer, Robert Moore. "Our customers tell us that we have the simplest and most useful invoice in the industry, primarily due to the power and capabilities of Leap RevChain."
"PAETEC was always a great customer of FTS Inc.," said Amos Sivan, FTS' CEO. "They have clearly seen the potential in the Leap RevChain solutions and we're delighted that they will be building on the great work we have done. This deal is a testament to the hard work and dedication of the great team we built at FTS Inc."
The company was started in 1991 as Daleen Technologies and was later renamed as Viziqor Solutions. FTS bought Viziqor, subsequently renamed to Formula Telecom Solutions, Inc., in December 2005 and ran the business, which primarily targeted service providers in the North American market, successfully and profitably until the sale to PAETEC. The employees of the RevChain Solutions division of PAETEC Software will continue to be based primarily out of Boca Raton, Florida.
The sale of FTS Inc.'s assets is evidence of FTS' ability to successfully work in new markets and to make highly successful solutions for the billing industry. Following the sale of FTS Inc., from its Israel headquarters, FTS will continue to offer solutions that will assist leading carriers to increase both revenues and customer satisfaction, as well as use their BSS as an enabler to drive the creation of new products and services.
Notes to Editors
On December 9 2010, FTS, its fully owned US subsidiary Formula Telecom Solutions Inc (FTS Inc) and PAETEC Holding Corp. (NASDAQ GS: PAET) entered into a definitive asset purchase agreement, pursuant to which PAETEC has agreed to acquire the entire assets and assume certain liabilities of FTS Inc for a total purchase price of $13 million in cash. The price excludes the cash and cash equivalents. Price shall be subject to a post closing price adjustment based on an agreed working capital acquired by PAETEC.
The transaction under the Asset Purchase Agreement (the agreement) is expected to close in late December of 2010. The agreement includes customary representations, warranties and covenants made by the parties for similar transactions. Representations and warranties are used to allocate risk between the respective parties to the agreement, including in cases in which the parties may not have complete knowledge of all relevant facts. Furthermore, certain of the representations and warranties in the agreement are subject to standards of materiality.
PAETEC (NASDAQ: PAET) is personalizing business communications for medium and large businesses, enterprise organizations and institutions across the United States. We offer a comprehensive suite of IP, voice, data, and Internet services, as well as enterprise communications management software, network security solutions, CPE, and managed services. For more information, visit www.paetec.com.
FTS (LSE: FTS) is a leading provider of billing, customer care and policy control solutions for communications and content service providers. By analyzing events from a business standpoint rather than just billing them, FTS allows providers to better understand their customer base and leverage business value from every event and interaction. FTS deploys its full range of end-to-end, stand-alone and add-on solutions to customers in over 40 countries and implements solutions in wireless, wireline, cable, content and broadband markets including multiple cross-network installations. Serving the evolving needs of telecommunications providers, the company's operations comprise international R&D locations and strategically-located sales support offices worldwide. Further information is available at www.fts-soft.com.