GTC Telecom Corp. Signs Agreement to Acquire TelSpan, Inc.; Agrees to a Related Transaction for Its Perfexa Subsidiary.
COSTA MESA, Calif.--(BUSINESS WIRE)--April 23, 2004
Acquisition Will Provide GTC With 4th Largest
Fiber Optic Network In Mexico
GTC Telecom Corp. (OTCBB: GTCC) today announced that it has entered into an Agreement to acquire TelSpan, Inc. in a tax-free stock swap transaction. TelSpan, a California corporation, owns the rights to acquire out of bankruptcy, at a substantial discount, the fourth largest fiber optic network in Mexico, consisting of approximately 4,000km of fiber optic lines and other related assets. The network, which is currently active, encompasses the "Golden Triangle" of Monterrey, Guadalajara and Mexico City as well as other key areas of Mexico, and will allow GTC to provide cost-effective telecom and information services to key metropolitan centers in the rapidly expanding U.S. / Mexico telecommunications corridor. TelSpan is currently in the process of finalizing its financing for the acquisition of the network. The closing of GTC's acquisition of TelSpan is conditioned on the successful financing and completion of its acquisition of the network and related assets.
In a related agreement, GTC agreed to sell a controlling interest of its Perfexa Solutions, Inc. Business Process Outsourcing ("BPO") call center and IT development subsidiary to the shareholders of Infospan, Inc., a California company commonly controlled by some of the shareholders of TelSpan. Infospan, a BPO, call center and IT development company headquartered in Irvine, CA, has call center operations in Mexico, significant sales networks for customer growth opportunities for India, Mexico and the U.S. and a seasoned management team with significant experience in the outsourcing sector.
S. Paul Sandhu, GTC's CEO stated, "The acquisition of TelSpan will allow us to leverage GTC's established U.S. telecommunications operations with TelSpan's access to the 4th largest fiber network in Mexico. This, coupled with our ongoing strategy to expand into the local services market, will allow us to create a full service, facilities-based, telecommunications company able to better compete in today's rapidly changing marketplace."
Mr. Sandhu continued, "The combination of Perfexa and Infospan allows Perfexa to tap Infospan's experienced sales force, extensive contract opportunities and resources. Perfexa will then be able to provide call center and IT development services not only from India but also from Mexico and the United States."
Farooq Bajwa, TelSpan's CEO stated, "We are very excited with the synergy created by combining TelSpan's Mexico facilities with GTC's established U.S. telecommunications operations. The coupling of GTC's U.S. operations and TelSpan's Mexican network will allow the combined companies to aggressively exploit the largest international telecom corridor between any two countries in the world. "
Mr. Bajwa continued, "Infospan's extensive sales network and potential business opportunities, together with Perfexa's established operations will allow the combine companies to become a significant player in the world-wide Business Process Outsourcing market."
Pursuant to the terms of the Acquisition Agreements, upon completion of the proposed transactions, TelSpan shareholders will secure a 84% majority control position within GTC and Infospan's shareholders will secure a 84% majority control position within Perfexa. The closing of the transactions are conditioned upon approval of GTC's shareholders which is anticipated to occur within the next ninety days.
About GTC Telecom Corp.
Founded in 1997, GTC Telecom and its subsidiaries provide long-distance, calling card, conference calling and toll-free services; Internet access to residential customers throughout the United States; as well as Business Process Outsourcing services. GTC provides its services directly to consumers, as well as through affiliate marketing programs with companies like Best Buy Inc. For more information, visit www.gtctelecom.com.
About Perfexa Solutions, Inc.
Perfexa Solutions, Inc. is committed to providing cost-effective customer service, CRM and vertical management solutions for small to medium-sized businesses for the global communication marketplace.
Through its wholly owned subsidiary, Perfexa Solutions Pvt. Ltd., an Indian company, Perfexa provides Inbound Call Center Management Solutions with future plans for Outbound Call Center Management Solutions, IT Management Solutions and Business Operations Management Solutions. Perfexa Solutions is in the process of finalizing its first call center in New Delhi, India, which is expected to become operational in the first quarter 2003. For more information visit www.perfexa.com.
About TelSpan, Inc.
TelSpan, Inc., is a telecommunications company with rights to purchase, at a significant discount, the 4th largest fiber optic network in Mexico. These assets, located in the "Golden Triangle" of Monterrey, Guadalajara and Mexico City, will allow TelSpan to tap into the fast growing Spanish-speaking marketplace throughout North, Central and South America.
About Infospan, Inc.
InfoSpan provides services such as customer service operations, overseas software development, billing, collections, data transcription and other outsourcing services to small, medium and enterprise level customers at its customer contact centers in the U.S. and Mexico.
This release may contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. This report should be read in conjunction with GTC Telecom Corp.'s annual report on Form 10-KSB and its quarterly reports on Form 10-QSB. GTC's results may vary significantly from quarter to quarter and will depend, among other factors, on product launches and market acceptance, manufacturing contracts, and distribution agreements.