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Filed by World Access, Inc.
Commission File No. 0-29782
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Communication TeleSystems International
d/b/a WorldxChange Communications.
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, Feb. 14 /PRNewswire/-- 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 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
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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 the 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 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
that 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 Reports 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.
CONTACT: Nancy L. de Jonge, Director of Investor Relations, Michael F. Mies,
Senior Vice President-Finance and Corporate Communications & Treasurer,
404-231-2025, both of World Access
World Access will be filing a joint proxy statement/ prospectus and other
relevant documents concerning the merger with the United States Securities and
Exchange Commission (the "SEC"). WE URGE INVESTORS TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC,
BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain the
documents free of charge at the SEC's website, www.sec.gov. In addition,
documents filed with the SEC by World Access will be available free of charge by
writing to: Investor Relations, World Access, Inc., 945 E. Paces Ferry Road,
Suite 2200, Atlanta, Georgia 30326, or by telephone request to (404) 231-2025.
READ THE JOINT PROXY STATEMENT/PROSPECTUS CAREFULLY BEFORE MAKING A DECISION
CONCERNING THE MERGER.
The participants (as defined in Instruction 3 to Item 4 of Schedule 14A) in
the solicitation of proxies from the World Access stockholders for the approval
of the merger include World Access and Walter J. Burmeister, Kirby J. Campbell,
Bryan Cipoletti, Stephen J. Clearman, John P. Imlay, Jr., Massimo Prelz
Oltramonti, John D. Phillips, John P. Rigas, Carl E. Sanders, Dru A. Sedwick and
Lawrence C. Tucker, each a director of World Access. PLEASE SEE WORLD ACCESS'
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999, FILED ON MARCH
30, 2000, FOR A DESCRIPTION OF THE WORLD ACCESS SECURITY HOLDINGS OF EACH OF THE
WORLD ACCESS DIRECTORS.
