SOUTHNET ISSUES STATEMENT REGARDING MERGER NEGOTIATIONS WITH TELECOM AMERICA
SOUTHNET ISSUES STATEMENT REGARDING MERGER NEGOTIATIONS
WITH TELECOM AMERICA
TAMPA, Fla., Nov. 14 /PRNewswire/ -- Following an announcement yesterday that it has entered formal negotiations to merge with Telecom America, Southnet Corporation (OTC, PHLX: SN) has provided the following additional information:
Based on unaudited information, Telecom America has approximately 11,000 subscriber phone lines throughout the United States, which include pay telephones and hotels. Their account base combined with Southnet's current long distance base would generate an estimated $10 million per year revenue stream for Southnet, according to preliminary analysis. Southnet is currently operating at approximately $3,100,000.00 per year gross revenues. The company estimates that combined revenues will net $1,100,000.00 to $1,300,000.00 in profits.
According to Robert J. Zradicka, president and CEO of Southnet Corporation, "We believe that there are many potential benefits beyond those that could be initially realized by putting the companies together. Telecom America has demonstrated a strong marketing capability, able to continue generating new accounts at a fast pace. Their strength in sales aligned with our expertise in switching systems and networks is a natural winning combination for the long term."
The company cautions that negotiations are still at an early stage and that several important issues must be resolved. "Both Telecom and Southnet are hopeful that we can accomplish what needs to be done to make this happen," stated Zradicka, "but I do want to exercise a word of caution that no deal is done until it's done. We both still have considerable due diligence to care for and issues relative to how the two firms actually come together are still being decided. We hope to have all the major points resolved within the next few weeks and will make those announcements as soon as possible."
/CONTACT: Robert J. Zradicka, president and CEO of Southnet Corp., 813-287-2880/ CO: Southnet Corporation; Telecom America ST: Florida IN: TLS SU: TNM BR-BN -- AT003 -- 4341 11/14/91 10:35 EST