With numerous acquisition agreements in hand and others awaiting, ComTec International Inc. is pursuing business opportunities in specialized mobile radio and other wireline and wireless sectors.
ComTec, formerly Nattem USA Inc., in May purchased Keystone Holding Corp. The transaction was valued at $3.6 million and paid in the form of 11.2 million shares of ComTec’s (Nattem’s) common stock, said the Aurora, Colo.-based company.
In the new configuration, ComTec acts as the holding company while the Keystone staff retains management control through the newly formed Key Communications Group Inc. subsidiary, said ComTec President Donald Mack. When the companies merged, Clifford Perlman resigned as ComTec’s president and chief executive officer-positions assumed by Mack, founder and chairman of Keystone. Mack said Perlman would remain as chairman of ComTec.
Mack founded Keystone Holding as a private company in March 1994 and has since concentrated business efforts on 800 MHz SMR and other telecommunications ventures. The company had encountered difficulty securing financing, commented Mack. Investors were interested but refrained from financing Keystone as a private entity. Hence, Mack sought a public vehicle to support his business plans.
“Initially and specifically, the SMR segment will be our primary focus,” noted Mack.
Growing through acquisitions, ComTec said it will benefit by “operating on beneficial economies of scale, a strengthened market position, an expanding revenue base and a highly valued position in the investment market.” The company said acquisitions will supply operating capital through service fees, constructed and non-constructed channels and other valuable assets.
Following a three-phase expansion strategy, Mack said he expects to build out in targeted markets within the next 18 months. However, these plans assume Key will produce adequate financing. Mack said the company currently is negotiating for a $25 million revolving credit facility.
Phase one of expansion focuses on the Rocky Mountain and Central regions of the United States. Immediate opportunity lies in these areas, ComTec said, where there are markets not yet explored by other large SMR companies. Acquisitions in the first phase represent between about 550 and 575 SMR channels, commented Mack.
Earlier this month, Key completed acquisition agreements with Denver-based Mobile One Communications, Omni Range Communications LLC and JSP Inc., Mack said. Negotiations underway to purchase Wyoming-based Worland Services and Communications Inc. and Iowa-based Fairchild Communications Inc. are expected to be completed next month, the company said.
Together “these companies will add in excess of $1.3 million in revenues, $900,000 in assets and 87 operating and revenue generating SMR channels,” noted Key.
The company also recently purchased PCC Management Inc. of Oceanside, Calif. The transaction is worth about $1.5 million in gross assets, said Key. PCC operates more than 2,100 SMR licenses and channels, of which about 400 have been constructed. Key presently has about 10 other companies slated for acquisition, said Mack.
The Southern, Southeastern and Western areas of the United States kick off the second phase of ComTec’s planned expansion. During this phase, the company’s marketing team also plans to focus on gaining customers in newly acquired markets in the Central region, said Key.
In phase three, the company expects to become one of the largest competitors in the SMR industry, especially effective in the Midwest and Northeast.
Thus far, Key has gained acquisition funding through private placement of stock, explained Mack, used primarily for building unconstructed channels, working capital and cash requirements.
Mack noted his company has management/option agreements in 38 states, including Hawaii, Puerto Rico and the Virgin Islands, which encompass about 2,500 to 2,600 channels.
Key also is pursuing opportunities in the 220 MHz band, data markets and in the long-distance market, Mack indicated.
