A-Plus Communications Inc. will merge with Network USA Paging Corp. to create a new company that will be the largest independent paging service provider based in the Southeast.
The merged company will be renamed A-Plus Network Inc. and will serve more than 430,000 paging and voice mail units in service. The merger is valued at about $77 million, the companies said.
Network USA is a privately held company based in Pensacola, Fla., that provides paging service via its own transmission facilities through resellers, agents and an interconnected nationwide network of affiliates. Network USA’s shareholders will own about 40 percent of the combined company. Five directors from Network USA will be invited to join the A-Plus board of directors.
“This marks the first business combination that A-Plus has made in the paging business,” said Elliott Singer, chairman and chief executive officer of Nashville-based A-Plus Communications. “While consolidation has been accelerating in the paging industry, we have purposely waited until we found the right strategic opportunity.”
A-Plus will issue 4.2 million shares of A-Plus common stock to Network USA shareholders, along with a cash payment of $12 million. A-Plus also will redeem about $4.5 million of Network USA’s preferred stock and assume the company’s debt of about $10.9 million.
The merger is subject to the approval of A-Plus shareholders, regulatory approvals and other conditions. Singer, who holds about 21 percent of A-Plus’ outstanding shares, has agreed to vote in favor of the merger.
“This merger will allow both companies to achieve greater growth due to improved operating efficiencies, significant synergies, enhanced management depth, stronger resources and better access to capital markets,” Singer said.
Singer will remain company chairman and CEO after the merger. Ray Russenberger, chairman and CEO of Network USA, will be named vice chairman of the combined entity.
A-Plus Communications is a partner in the PCS Development Corp., which is licensed to offer narrowband personal communications services. The relationship with PCS Development will give A-Plus Network’s customers access to PCS networks, according to the companies.
The merged companies intend to have a more fortified presence in the retail consumer market for paging and PCS. Network USA operates 26 retail locations in eight states. A-Plus opened nine retail stores in 1994 and plans to open 10 more this year. Network USA’s customers and affiliates will have access to emerging new narrowband PCS services that A-Plus plans to introduce in the future through PCS Development Corp., Singer said.
For the period ended March 31, Network USA had 202,679 paging and voice mail units in service, reflecting a growth of 62 percent.
