Filed Pursuant to Rule 425
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Filer: CoreComm Limited
Subject Company: CoreComm Limited
Subject Company Exchange Act File No.: 0-24521
Investors and security holders are urged to read the proxy statement/prospectus
regarding the business combination transaction referenced in the following
information, when it becomes available, which will be included in the
Registration Statement on Form S-4 to be filed by the ultimate parent company in
the business combination transaction with the Securities and Exchange Commission
because it will contain important information. After it is filed with the SEC,
investors and security holders may obtain a free copy of the proxy
statement/prospectus on the SEC's website (www.sec.gov). A proxy statement and
prospectus with respect to the proposed transaction will also be made available
for free to CoreComm stockholders by CoreComm and ATX.
CoreComm, its directors, executive officers and certain other members of
management and employees may be soliciting proxies from CoreComm stockholders in
favor of the merger and acquisition. Information concerning the participants in
the solicitation will be set forth on a Schedule 14A filed as soon as
practicable.
* * *
CoreComm Limited Announces Definitive Agreement
To Acquire ATX Telecommunications Services, Inc.
NEW YORK, March 10 /PRNewswire/ -- CoreComm Limited (Nasdaq: COMM -
news) announced today that it has entered into a definitive agreement to acquire
ATX Telecommunications Services, Inc. ("ATX").
ATX, a privately held company based in Philadelphia, Pennsylvania is a
"Smart Build" CLEC and integrated communications provider serving the
Mid-Atlantic states.
Under the agreement, CoreComm will pay a total consideration of $900
million, consisting of (i) approximately 12.4 million shares of CoreComm common
stock ($500 million); (ii) $250 million of 3% Convertible Preferred Stock, which
is convertible into CoreComm common stock at a stock price of $44.36
(representing a 10% premium to the current 10-day average price of $40.33 per
share) and (iii) $150 million in cash, of which up to $70 million, at CoreComm's
option, may be paid in senior notes with a two-year maturity. Under the
agreement's cap provisions, the shares of common stock issued will be reduced if
the CoreComm stock price at closing exceeds $46.38 per share, and the number of
common shares underlying the Convertible Preferred Stock will be reduced if the
CoreComm stock price at closing exceeds $44.36 per share. ATX has no
indebtedness.
ATX offers a variety of telecommunications services, including local,
long distance, data integration, Internet access, and web hosting and
development. The
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Company has approximately 20,000 small and medium-sized business customers,
representing approximately 100,000 local access lines and an additional 320,000
long distance access line equivalents. ATX has local access facilities in
Philadelphia and is currently expanding local facilities into New Jersey,
Baltimore, and Washington D.C., where it has historically had a strong long
distance presence. ATX is presently completing the buildout of a network
operations center that will include approximately 18,000 square feet of web
hosting and e-commerce warehousing facilities.
In the fourth quarter of 1999, ATX had annualized revenue of
approximately $150 million and annualized EBITDA of approximately $11 million.
Commenting on today's announcement, Barclay Knapp, President and CEO of
CoreComm, said: "Adding ATX brings several immediate benefits to CoreComm. ATX's
presence in Philadelphia and their roll-out in New Jersey, Baltimore, and
Washington D.C., coupled with our own cutovers in New York City and Boston, will
accelerate our Smart LEC eastern expansion by at least a year.
"ATX also brings a solid track record in the small to medium-sized
business market in the region, with strong revenue growth and positive EBITDA.
We believe that their successful business sales strategy is scalable and
expandable throughout our company, and that the addition of CoreComm's
residential strategy will add significant value potential.
"ATX is also rapidly expanding in DSL and T-1 data and Internet
services. Their web hosting business has grown dramatically, and they are
currently significantly expanding their data center capacity. These services
will be expanded within CoreComm as well.
"The ATX management team has an excellent fifteen-year track record,
and we welcome them wholeheartedly to the CoreComm family."
ATX's accomplishments and highlights include:
-- ATX's network incorporates the same smart build strategy as
CoreComm's, including a Local Class 5 switch and two tandem
switches in Philadelphia; Local facilities expansion in New
Jersey, Baltimore, and Washington D.C.; and approximately 50
collocation facilities in progress.
-- High average revenue and low churn rates for their customers,
75% of which are under long-term contracts.
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-- Rapidly expanding DSL and data integration business, including
web hosting and development and e-commerce warehousing.
-- ATX has approximately 525 employees.
-- Pro forma for the transaction, the combined company would have
more than 200,000 local access lines as of year-end 1999, and
approximately 180 collocation facilities in progress.
The transaction is subject to regulatory and CoreComm shareholder
approval and other customary closing conditions, and is expected to close during
the summer of 2000.
CoreComm is an innovative communications company that provides
integrated telephone, Internet, and data services to business and residential
customers in targeted markets throughout the United States. We are exploiting
the convergence of telecommunications and information services through our
"Smart Local Exchange Carrier" or "Smart LEC" network strategy. Our Smart LEC
strategy involves the ownership of switches and related equipment for the
provisioning of services, and the leasing of the unbundled local loop, combined
with the provisioning of an IP-based, national network. This configuration of
local and national owned and leased facilities allows us deliver a wide range of
communications services over a network architecture which we design to be
capital efficient and primarily requires success-based incremental capital. Our
goal is to expand our facilities, geography and services to become a leading
switch-based communications provider in selected major markets across the United
States.
o "Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995:
o In addition to the historical information presented, this
release also includes certain forward-looking statements
concerning the future development of the business. Such
statements represent the Company's reasonable judgment on the
future and are based on assumptions and factors that could
cause actual results to differ materially. The Company assumes
no obligation to update these forward-looking statements to
reflect actual results, changes in assumptions or changes in
factors affecting such statements.
