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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): February 29, 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 with Communication TeleSystems International d/b/a
WorldxChange Communications ("WorldxChange"). WorldxChange, a private,
multinational telecommunications service provider, operates 45 switches in 12
countries and offers an array of telecommunications services concentrating on
the needs of business and residential customers.
Pursuant to terms of the merger agreement, shareholders of WorldxChange will
receive approximately 31 million shares of World Access Common Stock, subject to
adjustment under certain circumstances. In addition, World Access will assume
approximately $225 million in WorldxChange debt and will provide bridge
financing to WorldxChange in an amount up to $30 million. 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 WorldxChange to be elected to the Board of
Directors of World Access.
The merger is subject to, among other things, certain regulatory approvals and
approval by the shareholders of World Access and WorldxChange. 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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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
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EXHIBIT INDEX
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EXHIBIT
NUMBER DESCRIPTION
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99 Press Release, issued February 14, 2000
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EXHIBIT 99
[LOGO] WORLD
ACCESS
WORLD ACCESS TO ACQUIRE WORLDXCHANGE COMMUNICATIONS
Acquisition Accelerates European Retail Strategy Focused on SME Customers
WorldxChange's State-of-the-Art, Internet-Based Provisioning, Customer Care
and Billing Capabilities Will Serve as the Foundation for European Systems
Company Expects to Realize Significant Synergies Through the Combination of
Networks and Organizations
ATLANTA, GEORGIA - February 14, 2000 - World Access, Inc. (Nasdaq:
WAXS) announced today that it has signed a definitive merger agreement with
Communication TeleSystems International d/b/a WorldxChange Communications
("WorldxChange"), a private multinational telecommunications service provider.
Operating 45 switches in 12 countries, WorldxChange offers an array of
telecommunications services concentrating on the needs of its business and
residential customers. WorldxChange generated pro-forma revenues in 1999 of
approximately $600 million, through its primary operations in North America,
Germany, the United Kingdom, France, the Netherlands, Belgium, Australia and New
Zealand.
Pursuant to the terms of the agreement, shareholders of WorldxChange
will receive approximately 31 million shares of World Access common stock,
subject to adjustment under certain circumstances. In addition, World Access
will assume approximately $225 million in WorldxChange debt. The transaction,
which is expected to close by the end of the second quarter, is subject to,
among other things, certain regulatory approvals and the approval of the
shareholders of World Access and WorldxChange. 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 WorldxChange
in an amount up to $30 million. WorldxChange will be entitled to elect one
director to the World Access Board of Directors.
John D. Phillips, Chairman and Chief Executive Officer of World Access,
said, "Our acquisition of WorldxChange represents a major step forward in our
plans to be a leader in enhanced retail telecommunications services throughout
Europe. WorldxChange has a significant presence in key European markets such as
the UK, Germany and the Benelux, principally serving SME customers. More
importantly, WorldxChange has developed state-of-the-art, Internet-based
information management systems, incorporating all key aspects of retail telecom
services, including provisioning, billing, fraud protection and customer care.
We
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believe these capabilities are among the finest in the industry, and will
serve as the foundation for our retail management systems throughout Europe. In
addition to the impressive systems and significant network assets, WorldxChange
has a talented and dedicated management team that will play a key role in our
strategic development."
Walt Anderson, Chairman of WorldxChange, commented, "This is an
exciting opportunity for WorldxChange to become part of a company that is
focused on leading the consolidation of the fragmented European telecom
industry. Our retail and wholesale volumes and expertise, combined with the
significant scale and network assets of World Access, will help to solidify
World Access' position as a leading provider of bundled voice, data and Internet
services to SME markets in Europe. We anticipate that our integration into World
Access will result in significant cost savings in the areas of network costing,
least cost routing, network operations, and some general and administrative
costs. We expect that these savings, together with enhanced product offerings,
will further increase our competitiveness as we continue to rapidly grow our
European and Pacific retail operations."
"The combination of World Access with NETnet, Star and WorldxChange,"
continued Mr. Phillips, "creates one of the largest independent telecom service
companies focused on the European market. The network strengths, attractive
retail customer bases, developed sales organizations, and significant traffic
tonnage and scale of these operations significantly accelerates our strategic
development."
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 acquisition of WorldxChange, as well as the
merger with STAR Telecommunications, will be discussed in detail during this
call.
WorldxChange is a leading global telecommunications company that
specializes in providing high-quality, low-cost services to retail and wholesale
customers in 13 countries, including the United Kingdom, Germany, the United
States, France, The Netherlands, Belgium, Chile, Guatemala, Australia, Canada,
and New Zealand. The company operates 45 switches which are connected with an
extensive network of owned and leased undersea and land-based fiber optic
cables, providing more than 750,000 customers each month with affordable
communications services worldwide.
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 US and 13
European countries, World Access's 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 www.waxs.com.
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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
IDENTIFY, 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, JUNE 30, 1999 AND SEPTEMBER 30, 1999
AND THE COMPANY'S REGISTRATION STATEMENT ON FORM S-3 (NO. 333-43497), AS SUCH
FILINGS HAVE BEEN AMENDED, ALL OF WHICH ARE INCORPORATED BY REFERENCE INTO THIS
PRESS RELEASE.
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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
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