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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): April 24, 2000
PentaStar Communications, Inc.
(Exact Name of registrant as specified in its charter)
Delaware 0-27709 84-1502003
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1522 Blake Street, Denver CO 80202
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 825-4400
None
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(Former name or former address, if changed since last report.
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Item 5. Other Events
On April 24, 2000, PentaStar Communications, Inc. announced that it has entered
into a purchase agreement to acquire the communications services agency business
of Telecomm Industries Corp. Attached to this Current Report on Form 8-K as
Exhibit 99 is a copy of the Company's related press release dated April 24,
2000.
Item 7. Financial Statements and Exhibits
Exhibit 99 Press release of the Company dated April 24, 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.
Date: April 25, 2000 PENTASTAR COMMUNICATIONS, INC.
By: /s/ David L. Dunham
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David L. Dunham
Chief Financial Officer
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EXHIBIT INDEX
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EXHIBIT
NUMBER DESCRIPTION
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99 Press Release of the Company dated 4/24/00
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EXHIBIT 99
[PENTASTAR COMMUNICATIONS, INC. LOGO]
PENTASTAR COMMUNICATIONS, INC. ANNOUNCES
AGREEMENT TO ACQUIRE AGENT BUSINESS OF
TELECOMM INDUSTRIES CORP.
* * *
UPON COMPLETION, PENTASTAR WILL BECOME THE NATION'S LARGEST
COMMUNICATIONS SERVICES AGENT
Denver, Colorado (April 24, 2000) - PentaStar Communications, Inc. (NASDAQ:
PNTA), one of the largest communications services agent in the country,
announced today that it has entered into a purchase agreement to acquire the
communications services agency business of Telecomm Industries Corp. ("TCMM")
(OTC: TCMM). TCMM will retain its hardware and equipment business.
TCMM is the nation's largest Ameritech distributor of voice and data services.
Ameritech is a subsidiary of SBC Communications, Inc. (NYSE: SBC). TCMM is also
an authorized distributor for BellSouth. Annual revenues for the acquired
business of TCMM are in excess of $9 million. Upon completion of this
acquisition, PentaStar's combined annualized run rate revenue will be
approximately $38 million, establishing PentaStar as the largest communications
services agent in the country.
The acquisition of TCMM's agent business will solidify PentaStar's ability to
provide nationwide coverage by establishing PentaStar's presence in several
major metropolitan areas in the Midwest. PentaStar will be able to service its
customers nationally through the new service provider relationships with
Ameritech and Bell South resulting from the TCMM acquisition and its established
service provider relationships with key regional bell operating companies,
including Bell Atlantic, Pacific Bell, Southwestern Bell and US WEST, and other
key long distance data carriers including, Cable & Wireless and Qwest.
Under the terms of the purchase agreement, the consideration for the transaction
is approximately $7.1 million in PentaStar common stock and cash, the assumption
of $6.2 million in debt and the assumption of certain operating liabilities.
Approximately $4.5 million of the debt assumed is secured by $6.2 million of
future commissions, due to PentaStar from the existing Ameritech contracts,
which will be realized over the next several years. In addition, there are
potential earnout payments to TCMM based upon the earnings before taxes and
amortization during the period from April 1, 2000 through March 31, 2001.
The TCMM board of directors has approved the acquisition. Additionally, certain
shareholders of TCMM (with ownership totaling 50.57% of the outstanding shares
in TCMM) have contractually agreed to vote in favor of the transaction. The
transaction is subject to approval by the current lenders of TCMM on terms
satisfactory to PentaStar. The acquisition is expected to close in June 2000
upon formal TCMM shareholder approval.
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TCMM is a full-service communications agent that focuses on providing voice,
data, cellular, video and telephone network solutions to business customers.
TCMM has a Five-Star rating with Ameritech, a distinction made by Ameritech for
those distributors that excel in sales, customer service and customer
satisfaction. In addition to being the largest overall Ameritech agent, TCMM is
the largest agent in the individual Ameritech states of Indiana and Ohio.
"TCMM's significant market presence, relationship with Ameritech and strong
operating fundamentals create a solid foundation for PentaStar to establish its
Midwest operations," said Bob Lazzeri, Chief Executive Officer of PentaStar.
"In less than 6 months, PentaStar has acquired or agreed to acquire six agents
and upon closing of the TCMM acquisition will have annualized revenue run rate
of approximately $38 million. Upon completion of all acquisitions PentaStar will
be the largest communications services agent in the country with coverage in
over 22 metropolitan markets, servicing over 40,000 small and medium-sized
business customers," added Lazzeri.
"Our decision to join PentaStar is important for our shareholders and our
customers. Our shareholders, through TCMM's share ownership of PentaStar, will
gain ownership in the largest, most comprehensive nationwide communications
agent. Our customers will get access to a broad spectrum of communication's
products and the ability to provide a nationwide solution. This move positions
us to meet our customers nationwide communication needs and grow our revenues
rapidly," said Paul Satterthwaite, Chief Executive Officer at TCMM.
ABOUT PENTASTAR COMMUNICATIONS, INC.
PentaStar designs, procures and facilitates the installation and use of
communications services solutions that best meet customers' specific
requirements and budgets. PentaStar was formed in March 1999 to become a
national communications services agent and specializes in being the single
source provider of total communication solutions for its business customers.
PentaStar's common stock is traded on the Nasdaq SmallCap Market under the
ticker symbol PNTA. For more complete information about PentaStar, contact
PentaStar Communications, Inc., 1522 Blake Street, Denver, Colorado 80202, (303)
825-4400, visit the company's website at www.pentastarcom.com or send an e-mail
to [email protected]
ABOUT TELECOMM INDUSTRIES CORP.
TCMM is one of the nation's largest distributors of voice and data services for
Ameritech and BellSouth. TCMM combines these services with products from
world-class manufacturers to provide single source telecommunication and
computing solutions to its business customers. TCMM specializes in being the
single provider of the customer's total communication needs.
This press release may contain forward-looking statements. Such forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results or outcomes to differ materially from those currently
anticipated. Factors that could affect actual results or outcomes include those
described in PentaStar's Registration Statement on Form SB-2, its Form 10-KSB
dated March 30, 2000, its Form 8-K dated March 31, 2000, its Form 8-K dated
April 17, 2000 and all other Securities and Exchange Commission filings
submitted as of this date.
