WAKE up out there its time to rock
HOUSTON (April 7) BUSINESS WIRE -April 7, 1999--Equalnet Communications Corp. (Nasdaq: ENET) announced today that they intend to acquire Network Communications Solutions, LLC ("NCS") a privately held Internet service provider, Web host and design firm based in Modesto, Calif.
NCS is an Internet e-commerce enabler that provides turn-key e-commerce solutions for network marketing organizations by providing individual network marketing consultants with personal e-commerce enabled web pages. NCS facilitates network marketing companies' creation of virtual communities for their members and also develops unique software applications tailored to individual requirements. NCS currently has contracts with approximately 20 network marketing companies, which have approximately one million distributors in the U.S., Canada and Europe.
Industry sources indicate that there are over 20 million people associated with the thousands of network marketing companies in the United States, and that retail sales through network marketing are over $20 billion annually. In addition to serving network marketing companies, NCS also develops and provides Web enabling e-commerce solutions for affinity groups
According to Forrester Research, a technology analyst and research firm, the market for Web and application hosting services is projected to grow to $15 billion in the year 2002, from just under $1 billion in 1998. By 2003, U.S. e-commerce is projected to leap beyond $1.4 trillion in sales.
"We believe this acquisition will bring us preferred access to cross-sell our suite of telecom products and services to member companies and their network marketing consultants," said Mitchell Bodian, president and chief executive officer of Equalnet. "Additionally, we intend to use our established distribution channels to offer the complete range of Internet products and services provided by NCS to our existing subscriber base."
"This is a further step in the evolution of Equalnet away from its origins as a long distance reseller and toward more dynamic and rapidly growing niche markets with innovative products and services. The Internet represents the ultimate wide area network (WAN) and telecommunication providers should naturally address integration of voice and data communication, WAN system development and e-commerce software solutions. Combining NCS' strengths with those of Equalnet allows us to rapidly introduce turn-key Internet communications solutions to vertical niche markets."
Don McNely, founder and chief executive officer of NCS added, "We have a proven business model that combines rapid Internet growth with defined market niches - network marketing companies and affinity groups. The acquisition of NCS by Equalnet should permit us to operate more efficiently, accelerate the growth of our client base, offer a complete range of Internet and other telecom services and provide unique software e-commerce solutions to our customers."
Total consideration for the acquisition will be $1 million of Equalnet stock to be paid at closing, plus Equalnet stock equal to five times the average monthly revenue of NCS at the end of the first year following the acquisition. Closing of the transaction is expected to occur before the end of April and is subject to definitive documentation and approval by the Board of Directors of Equalnet. This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1993, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. All statements other than statements of historical fact included in the press release, including without limitation, Equalnet's business strategy, plans and objectives, and forward-looking statements. Although Equalnet believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such explanations will prove to be correct. Numerous factors could cause actual results to differ materially from Equalnet's expectations, including without limitation, general economic and competitive factors, and the possibility that the acquisition of NCS by Equalnet will not be consummated. Additional risk factors are discussed in Equalnet's Annual Report on Form 10-K for the year ended June 30, 1998, which is on file with the Securities and Exchange Commission. Readers should carefully review the cautionary statements and risk factors described in documents filed by Equalnet from time to time with the Securities and Exchange