LOS ANGELES-SmarTalk Teleservices Inc. said it signed a definitive agreement to acquire the retail prepaid business of Frontier Corp. for $35 million cash.
Frontier distributes prepaid phone cards in more than 4,000 retail locations including Merit Stations, King Sooper, Southwest Supermarkets, Acme Supermarkets, Qwik Shops and Wegmans’ stores. Once the transaction is completed, SmarTalk said it will have distribution agreements providing access to more than 40,000 locations throughout North America.
“Our decision to exit the prepaid business reflects Frontier’s decision to focus on its core business,” said Joseph P. Clayton, president and chief executive officer of Frontier, which provides long-distance, local and wireless services. “The prepaid business being acquired by SmarTalk is fundamentally a good business that lies within SmarTalk’s core competencies.”
Erich Spangenberg, president and chief operating officer of SmarTalk, said he expects the deal to increase expenses in the short-term. The transaction is expected to close at or before the end of the year, he said.
SmarTalk manufactures and distributes prepaid calling cards and other enhanced telecommunications products, which are sold at retail locations and marketed to advertising and promotional clientele.
