NEW YORK-World Access Inc., Atlanta, rang in 1998 in the same way it rang out 1997, with an acquisition announcement.
World Access announced Jan. 2 a definitive agreement to purchase a 67-percent stake in NACT Telecommunications Inc., Provo, Utah, for $65 million in cash and $30 million of its own stock. NACT, formerly called National Applied Computer Technologies, is a single-source provider of fully integrated telecommunications applications switching systems.
In late September, its parent, GST Telecommunications Inc., Vancouver, Wash., announced it had retained Hambrecht & Quist L.L.C., San Francisco, to arrange disposal of its interests in NACT.
World Access announced Dec. 29 another definitive agreement, this one to buy all of Advanced TechCom, a Wilmington, Mass., designer and manufacturer of digital microwave and millimeter wave radio systems. Conditions of the Advanced TechCom purchase call for its shareholders to receive approximately $10 million of World Access stock and for World Access to assume $5 million in Advanced TechCom debt.
Advanced TechCom will continue operations as a stand-alone division of World Access with Dr. Ernie Lin, its president and chief executive officer, remaining in charge. Likewise Lindsay Wallace, president and CEO of NACT, will continue to lead the company in its new status as a majority-owned subsidiary of World Access.
Steven A. Odom, chairman and chief executive officer of World Access, said the two acquisitions represent a giant leap toward the company’s goal of offering total telecommunications solutions to carriers using its own proprietary technology.
“I have never been more excited about what we are doing,” he said.
“About the only thing we don’t offer (now) is international access.”
World Access develops, manufactures and markets wireline and wireless switching, transport and access products, primarily for the United States, Caribbean Basin and Latin American telecommunications markets. It also provides its customers with design, engineering, manufacturing, testing, installation, repair and other value-added services.
As a result of these acquisitions, Mark A. Gergel, vice president and chief financial officer of World Access, said, “at a minimum, we expect sales to increase by $40 million and earnings per share by 5 (cents) to 7 cents in 1998. In 1999, we expect sales to increase by $70 million and earnings per share by 25 cents to 30 cents.
“(Overall) sales for World Access in 1998 will approach the $200 million level, up from $100 million at the end of 1997.”
