Mail.com to Acquire Swift Telecommunications in $84M Deal
Concurrent with its acquisition by Mail.com, Swift Telecommunications, a provider of international business messaging services, said it acquired the EasyLink Services division of AT&T Corp. for more than $50 million.
As part of its acquisition deal with Swift, Mail.com advanced the company a $14 million loan to help pay for its EasyLink acquisition. Mail.com, New York, also said it will assume a $35 million note issued to AT&T in that deal.
Under terms of the Swift Telecommunications acquisition, Mail.com will pay nearly $835,000 in cash to George Abi Zeid, president and sole shareholder of Swift. It also will issue an unsecured note for nearly $9.2 million and nearly 19 million shares of Mail.com Class A common stock to Zeid.
In addition, Mail.com will reimburse Zeid for a $1.5 million advance made to Swift to fund a portion of the EasyLink Services deal with AT&T.
Mail.com said that as part of its acquisition of Swift, it will acquire Telecom International Inc., a Swift affiliate that operates as AlphaTel, and will take a 25 percent minority interest in two Swift subsidiaries for about $6.5 million in cash and stock.
"In one transaction, we will achieve dramatic growth in our revenues and accelerate our breakeven, quadruple our customer base to over 40,000 enterprises allowing for significant cross-selling opportunities and solidify our international presence, with minimal overlap in our customer base, technology and services," Thomas Murawski, Mail.com's CEO, said.
The company said it expects 2001 revenue to exceed $150 million and expects to reach breakeven on an operating cash flow basis in the third quarter.
With this acquisition, Mail.com will have 20 million hosted e-mail boxes and will distribute more than 2.5 million messages a day.