Talk America to Be Acquired by Cavalier Telephone & TV
September 22 2006 - 2:10PM
Business Wire
Talk America (NASDAQ:TALK) announced today that it has entered into
a definitive merger agreement with privately-held Cavalier
Telephone & TV based in Richmond, Virginia. Under the terms of
the agreement, Cavalier will acquire all of Talk America shares for
$8.10 per share in cash, representing total consideration of $251
million. The merger of Talk America and Cavalier will create one of
the largest competitive communications companies in the United
States with over $750 million in revenue and $130 million in EBITDA
(Earnings Before Interest, Taxes, Depreciation and Amoritization).
The combined company currently serves over 550,000 residential
customers, 85,000 business customers and employs over 2,000 people.
At closing, the new Cavalier will serve customers in 6 of the top
20 metropolitan services areas in the country, including Atlanta,
Baltimore, Cleveland, Detroit, Philadelphia and suburban
Washington, DC. Cavalier is one of the fastest growing and most
innovative telecommunications companies in the United States,
serving residential and commercial customers with an expansive
product portfolio. In May of this year, Cavalier became one of the
first companies in the country to roll out Internet Protocol TV
over its state-of-the-art network completing its triple play
service offering of voice, video and high speed internet service.
Cavalier also serves commercial customers, state and federal
government customers and provides wholesale services to carriers.
Ed Meyercord, CEO of Talk America commented, "The merger with
Cavalier will significantly enhance Talk America's competitive
position in the market by adding Cavalier's high quality and
leading edge product portfolio to our service offerings and by
leveraging their extensive fiber network which overlaps our core
markets in Michigan, Ohio and the Southeast." At closing, Mr.
Meyercord will become CEO of Cavalier and report to Brad Evans,
current CEO of Cavalier, who will become Cavalier's Executive
Chairman. Mr. Evans commented, "The combination brings the
strengths of two of the nation's most successful competitive
carriers together. Talk's state-of-the-art back office support
system, their extensive sales and marketing distribution channels
and Cavalier's advanced network architecture will help provide our
combined customers the newest and most advanced telecommunications'
solutions in the marketplace." Talk America has received an opinion
from its financial advisors that the transaction is fair to its
shareholders from a financial point of view. The transaction,
expected to close in December, has been approved by both companies'
boards of directors and is subject to Talk America shareholders'
approval, regulatory approvals and other closing conditions. Talk
America was advised by The Blackstone Group in connection with this
transaction. Cavalier was advised by Jefferies & Company, Inc.
Wachovia Bank, N.A. has issued commitment letters for financing
this transaction. About Talk America Talk America, is a leading
competitive, integrated communications provider that offers phone
services and high speed Internet access to both business and
residential customers. Services include local and long distance
phone service, and data services such as high-speed connectivity,
security, web hosting, and network services. Talk America delivers
value in the form of savings, simplicity and quality service to its
customers through its leading edge network and award-winning back
office. About Cavalier Telephone, LLC Cavalier Telephone is a
facilities-based, full-service local telephone company (CLEC)
offering the latest in advanced telecommunications products,
including advanced telephone features and high-speed Internet
access for business and residential customers. Cavalier Telephone
currently services over 35,000 business and 215,000 residential
customers in Richmond, Hampton Roads, Northern Virginia, Maryland,
Philadelphia, Delaware, Southern New Jersey, and the District of
Columbia. For additional information regarding Cavalier Telephone,
visit the company's website at www.cavtel.com or contact Andy
Lobred at (804) 422-4100. Please Note: The statements contained
herein regarding the future results of operations of Talk America
should be, and certain other of the statements contained herein may
be, considered "forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such statements are identified by
the use of forward-looking words or phrases, including, but not
limited to, "estimates," "expects," "expected," "anticipates,"
"anticipated," "forecast," "guidance," and "targets". These
forward-looking statements are based on our current expectations.
Although we believe that the expectations reflected in such
forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to have been correct.
Forward-looking statements involve risks and uncertainties and our
actual results could differ materially from our expectations. In
addition to those factors discussed in the foregoing, important
factors that could cause such actual results to differ materially
include, among others, our inability to integrate effectively and
as anticipated acquired businesses, dependence on the availability
and functionality of local exchange carriers' networks as they
relate to the unbundled network element platform, failure to
operate our own local network in a profitable manner, increased
price competition for long distance, local and data services,
failure of the marketing of the bundle of local and long distance
services, long distance services and data services under our direct
marketing channels to a smaller marketing footprint, attrition in
the number of end users, failure to manage our collection
management systems and credit controls for customers, interruption
in our network and information systems, failure to provide adequate
customer service, and changes in government policy, regulation and
enforcement and/or adverse judicial or administrative
interpretations and rulings relating to regulations and
enforcement. Additional information concerning these and other
important factors can be found within Talk America's filings with
the Securities and Exchange Commission. The forward-looking
statements contained herein are made only as of the date of this
release, and we undertake no obligation to update the
forward-looking statements to reflect subsequent events or
circumstances. For a more detailed discussion of these factors, see
the Risk Factors discussion in Item 1A of our Annual Report on Form
10-K for the year ended December 31, 2005 filed March 16, 2006, as
amended by our Form 10-K/A filed March 28, 2006.
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