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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
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 1, 2000
(February 11, 2000)
WORLD ACCESS, INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-29782 58-2398004
(State of (Commission File No.) (I.R.S. Employer
Incorporation) Identification No.)
945 E. PACES FERRY ROAD, SUITE 2200
ATLANTA, GEORGIA 30326
(Address of principal executive offices, including zip code)
(404) 231-2025
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On February 11, 2000, World Access, Inc. ("World Access") entered into a
definitive agreement to merge STAR Telecommunications, Inc. ("STAR") with and
into World Access. STAR, based in Santa Barbara, California, provides global
telecommunications services to consumers, long distance carriers, multinational
corporations and Internet service providers worldwide. STAR provides national
and international long distance services, international private line, pre-paid
calling cards, dial-around services and international toll-free services.
Pursuant to terms of the merger agreement, each share of STAR Common Stock will
be converted into .3905 shares of World Access Common Stock. World Access may,
at its option, pay up to 40% of the consideration in cash. The merger is
expected to close by the end of the second quarter of 2000. The merger agreement
also provides that immediately following the effective time of the merger World
Access will cause one designee of STAR to be elected to the Board of Directors
of World Access. World Access has also agreed to provide bridge financing to
STAR in an amount up to $35 million.
The merger is subject to the divestiture by STAR of certain of its business
segments for minimum net cash proceeds specified in the merger agreement. Any
net proceeds in excess of such minimum amounts would increase the merger
consideration. The merger is also subject to, among other things, certain
regulatory approvals and approval by the shareholders of World Access and STAR.
The transaction is intended to qualify as a tax free reorganization, and will be
accounted for as a purchase transaction.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
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EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
99 Press Release, issued February 14, 2000.
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SIGNATURE
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 hereunto duly authorized.
WORLD ACCESS, INC.
Date: February 29, 2000 By: /s/ MARTIN D. KIDDER
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Martin D. Kidder
Vice President and Controller
3
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EXHIBIT INDEX
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EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
99 Press Release, issued February 14, 2000
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[LOGO] WORLD [LOGO]
ACCESS STAR COMMUNICATIONS, INC.
WORLD ACCESS AND STAR TELECOM REACH DEFINITIVE MERGER AGREEMENT
STAR Telecom's Network Infrastructure and European Operations Enhance
Global Strategy
Combined Company Positioned to be a Leading Provider of Bundled Voice,
Data and Internet Services in Europe
ATLANTA, GA and SANTA BARBARA, CA -- February 14, 2000 -- World Access,
Inc. (NASDAQ: WAXS) and STAR Telecommunications, Inc. (NASDAQ: STRX) announced
today that they have entered into a definitive agreement to merge STAR with and
into World Access. Under the terms of the agreement, each share of STAR common
stock would be converted into .3905 shares of World Access common stock. World
Access may, at its election, pay up to 40% of the merger consideration in cash.
Additionally, STAR will be entitled to elect one new director to the World
Access Board of Directors. The transaction is expected to close by the end of
the second quarter of 2000.
The merger is subject to, among other things, certain regulatory
approvals, the approval of the shareholders of World Access and STAR, and the
divestiture by STAR of certain business segments for specified minimum net cash
proceeds. Any net proceeds in excess of the specified minimum proceeds would
serve to directly increase the merger consideration. The merger is intended to
qualify as a tax-free reorganization, and will be accounted for as a purchase
transaction. World Access has agreed to provide bridge financing to STAR in an
amount up to $35 million.
John D. Phillips, Chairman and Chief Executive Officer of World Access,
said, "Our merger with STAR further strengthens our position in the European
long distance market. Our pan-European network will be greatly enhanced with
STAR's network assets and licenses in Germany, the largest market in Europe. In
addition to 24 international gateway switches and ownership on 17 transoceanic
cable systems, STAR also has interconnections between 23 German cities.
"This will further accelerate our plan to be a leading provider of bundled
voice, data and Internet services to retail customers throughout Europe," Mr.
Phillips continued. "In addition, STAR's strong wholesale business provides us
with further scale and network economies as we expand our retail presence. We
believe that the combined traffic tonnage of STAR and World Access will continue
to improve termination costs throughout the world."
Chris Edgecomb, Chairman and Chief Executive Officer of STAR Telecom
commented, "The merger of World Access and STAR will create a formidable force
in the competitive long distance market. The combined global network assets,
traffic volumes and retail service offerings will create tremendous operating
leverage for the new company. We hope to recognize tremendous synergies from
this merger, in the short term and long term, for our customers, employees and
shareholders."
The combination of World Access and STAR will create a leading provider of
global telecommunications services. The combined company will operate a state-
of-the-art pan-European network in 14 Western European countries and maintain
ownership positions in 26 international fiber optic cable networks.
World Access is sponsoring a conference call at 4:30 E.S.T. on Wednesday,
February 23, 2000 in connection with the release of the Company's year-end 1999
financial results. The STAR merger will be discussed in detail during this call.
Donaldson, Lufkin & Jenrette is serving as advisor to World Access with
respect to the transaction. Deutsche Banc is serving as advisor to STAR Telecom.
ABOUT STAR TELECOM
STAR Telecommunications provides global telecommunications services to
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consumers, long distance carriers, multinational corporations and Internet
service providers worldwide. STAR provides international and national long
distance services, international private line, prepaid calling cards,
dial-around services and international toll free services. For more
information, visit our website at http://www.startel.com.
ABOUT WORLD ACCESS
World Access is focused on being a leading provider of bundled voice, data
and Internet services to key regions of the world. The company competitively
provides end-to-end communications services through its redundant digital
network which is capable of supporting voice and data services, including frame
relay, Internet Protocol (IP), asynchronous transfer mode (ATM) and multimedia
applications. Located strategically throughout the U.S. and 13 European
countries, World Access' network backbone consists of gateway and tandem
switches, linked by an extensive fiber network encompassing tens of millions of
circuit miles. For additional information regarding World Access, please refer
to the Company's website at http://www.waxs.com.
THIS PRESS RELEASE MAY CONTAIN FINANCIAL PROJECTIONS OR OTHER
FORWARD-LOOKING STATEMENTS MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE
SECURITIES REFORM ACT OF 1995. SUCH STATEMENTS INVOLVE RISKS AND UNCERTAINTIES
WHICH MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY. THESE RISKS INCLUDE:
POTENTIAL INABILITY TO IDENTITY, COMPLETE AND INTEGRATE ACQUISITIONS;
DIFFICULTIES IN EXPANDING INTO NEW BUSINESS ACTIVITIES; DELAYS IN NEW PRODUCT
DEVELOPMENTS OR INTRODUCTIONS; THE POTENTIAL TERMINATION OF CERTAIN SERVICE
AGREEMENTS OR THE INABILITY TO ENTER INTO ADDITIONAL SERVICE AGREEMENTS; AND
OTHER RISKS DESCRIBED IN THE COMPANY'S SEC FILINGS, INCLUDING THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1998, THE COMPANY'S
QUARTERLY REPORT ON FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND THE
COMPANY'S REGISTRATION STATEMENT ON FORM S-3 (NO. 333-43497), ALL OF WHICH ARE
INCORPORATED BY REFERENCE INTO THIS PRESS RELEASE.
WORLD ACCESS CONTACT: NANCY L. DE JONGE MICHAEL F. MIES
(404) 231-2025 Director of Investor Relations Senior Vice President
http://www.waxs.com Corporate Communications - Finance & Treasurer
STAR Telecom Contact:
Investor Relations
(800) 899-1962
[email protected]
