SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) MARCH 10, 2000
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CORECOMM LIMITED
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(Exact Name of Registrant as Specified in Charter)
Bermuda 0-24521 Not Applicable
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
Cedar House, 41 Cedar Avenue, Hamilton, Bermuda HM 12
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code (441) 295-2244
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
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On March 10, 2000, CoreComm Limited ("COMM") announced that it had 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.
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.
Item 7. Financial Statements and Exhibits.
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Exhibits
99.1 Press Release, issued March 10, 2000
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CORECOMM LIMITED
(Registrant)
By: /s/ Richard J. Lubasch
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Name: Richard J. Lubasch
Title: Senior Vice President, General Counsel
and Secretary
Dated: March 10, 2000
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EXHIBIT INDEX
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Exhibit Page
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99.1 Press Release, issued March 10, 2000
Exhibit 99.1
[Logo of CoreComm Limited]
FOR IMMEDIATE RELEASE
CORECOMM LIMITED ANNOUNCES DEFINITIVE AGREEMENT
TO ACQUIRE ATX TELECOMMUNICATIONS SERVICES, INC.
New York, New York (March 10, 2000) - CoreComm Limited (NASDAQ: COMM) 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 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.
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"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.
- - 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.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: 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.
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For further information contact: Michael A. Peterson, Vice President - Corporate
Development or Richard J. Lubasch, Senior Vice President - General Counsel at
(212) 906-8485.
