NEW YORK-A+ Network Inc. signed definitive agreements to acquire Radio and Communications Consultants Inc. of Shreveport, La., and South Central Paging of Nashville, Tenn.
The two paging companies, formerly affiliates of A+ Network, bring an additional 14,000 paging units to its Southeast U.S. region, the company said.
A+ claims more than 596,000 paging units in service and under management agreements. Nationally, the company has an interconnected network of about 1,500 transmitters, 250 of which it owns. The rest are owned by 116 independent local and regional paging companies, according to Chuck Emling, president and chief executive officer.
“These acquisitions are a continuation of the acquisition strategy A+ Network initiated in 1995. (They) are natural fold-ins to our existing operations and demonstrate the value our affiliate network adds to our acquisition program,” said company Chairman Elliott Singer.
“Rather than just collecting an affiliate fee, owning is more financially attractive. We get all the cash flow,” he added.
Singer said most of the company’s affiliates generally operate under their own brand names but the two acquisitions will probably switch over to the A+ name.
“There’s a ton of confusion in the market right now about brand names,” Emling noted.
Financial terms were not disclosed but the company said the acquisitions will be financed through its existing cash reserves and by issuance of common stock. The transactions are subject to customary conditions and regulatory approvals but are expected to close in the third quarter, the company said.
“We will cover Dixie like the dew,” said Singer of the paging company’s new expansion by acquisition strategy.
Singer spoke at a Prudential Securities Inc. “Small-Cap Stock Conference” May 8.
Five of seven acquisitions undertaken since October 1995 by the Nashville-based company also were affiliates of its network, according to Singer. “We have six other acquisitions on our plate for the rest of this year,” he said.
The local, low-cost paging provider merged late last year with Network USA Paging Corp. of Pensacola, Fla., which offered regional, wide-area coverage.
“We put the two companies together in order to gain access to capital to begin to acquire other companies. The liquid cash we have makes it easier for our affiliates to sell themselves to us,” Singer said. “We plan to increase our market share by folding companies on the same frequency into our footprint.”
Prior to their merger, neither company had done outside acquisitions, but the combined companies now actively are participating in the general paging industry consolidation, he said.
A+ Network reported net revenues for the first quarter of 1996 were $19.6 million, up 8 percent from pro forma net revenues of $18 million in the first quarter of last year.
