-- Acquisition to immediately increase revenues by US $12 million
(97%) versus 2004
-- Acquisition to increase Prepaid Telecom subscribers by 18,000
to 23,300
-- Acquisition to deliver over US $2.2 million in annualized
earnings (before taxes, depreciation, and amortization)
MONTREAL, July 6, 2005 (PRIMEZONE) -- TelePlus Enterprises, Inc. (OTCBB:TLPE) (http://www.teleplus.ca), a vertically integrated provider of wireless and landline communications products and services across North America, today announced that its subsidiary TelePlus Connect, Corp. ("TelePlus Connect"), which operates the Company's prepaid telecom division, closed effective July 1 2005, its acquisition of Telizon, Inc. ("Telizon"), a reseller of landline and long distance services as well as an Internet service provider.
As part of the transaction, Telizon will be rolled into TelePlus Connect. Telizon's management will remain on board post acquisition. Telizon currently provides local and long distance services to over 18,000 commercial and residential line users in Ontario, Canada.
Strategic Acquisition
TelePlus' 2005 business plan set a goal for the company to reach US $21 million in revenue and US $600,000 in EBITDA for fiscal 2005. In the past three months TelePlus completed the acquisition of Keda Consulting, Freedom Phone Lines, Avenue Reconnect and now Telizon, Inc. All of these acquisitions will increase TelePlus' overall revenues by US $15.6 million to US $31.8 million and contribute in excess of US $2.9 million to earnings (before taxes, depreciation, and amortization) bringing the company into immediate profitability on a moving forward basis ahead of original expectations.
Telizon's back office will be used for the consolidation of TelePlus' prepaid Telecom operations. Integration of Avenue is already underway and, as previously announced, is proceeding as scheduled.
Acquisition Price
The transaction calls for TelePlus to pay a total consideration of US $8.6 million to the shareholders of Telizon in exchange of 100 percent of the Telizon shares. US $3.3 million is being paid on closing, US $1.93 million 12 months after closing and US $1.45 million 24 months after closing, the remaining balance of US $1.93 million is being paid in 24 monthly payments of US $80.6k per month.
"We are delighted to have closed the Telizon acquisition," stated TelePlus CEO Marius Silvasan. "The acquisition of Telizon falls right in line with our business model and fits perfectly within TelePlus Connect's strategy. The acquisition of Telizon not only increases our revenues by US $12 million, bringing them to over US $31 million but more importantly brings our company into immediate profitability, which will be reflected in our financial results starting in the third quarter. Lastly, we anticipate synergies to benefit our other subsidiaries once the integration of the acquisitions is completed," added Silvasan.
"Through this acquisition, both Telizon and TelePlus customers will continue to receive a high level of customer satisfaction and service," said Telizon's President, Tom Davis. "This is an important step in the right direction for our company and we look forward to working with TelePlus," added Davis.
(1USD = 1.24CDN)
This press release is available on the company's official online investor relations site for investor commentary, feedback and questions. Investors are asked to visit http://www.agoracom.com/ir/teleplus. Alternatively, investors are asked to e-mail all questions and correspondence to TLPE@agoracom.com where they can also request addition to the TelePlus investor e-mail list to receive all future press releases and updates directly.
About TelePlus http://www.teleplus.ca
TelePlus Enterprises, Inc. ("TelePlus") is a vertically integrated provider of wireless and landline products and services across North America. The Company's retail division - TelePlus Retail Services, Inc. -- owns and operates a national chain of TelePlus-branded stores in major shopping malls, selling a comprehensive line of wireless and portable communication devices. TelePlus Wireless, Corp. operates a virtual wireless network selling cellular network access to distributors in the United States. TelePlus Connect, Corp. is a reseller of landline and long distance services including Internet services.
About Telizon Inc.
Telizon Inc, headquartered in Ontario, Canada, is a reseller of landline and long distance services as well as Internet service provider. Telizon currently services over 18,000 commercial and residential lines in the Ontario area.
The statements which are not historical facts contained in this press release are forward-looking statements that involve certain risks and uncertainties, including but not limited to risks associated with the uncertainty of future financial results, additional financing requirements, development and acquisition of new product lines and services, government approval processes, the impact of competitive products or pricing a technological changes, the effect of economic conditions and other uncertainties, and the risk factors set forth from time to time in the Company's SEC reports, including but not limited to its annual report on Form 10-KSB; its quarterly reports on Forms 10-QSB; and any reports on Form 8-K. TelePlus Enterprises, Inc. takes no obligation to update or correct forward-looking statements.