LOS ANGELES-SmarTalk TeleServices Inc. announced it plans to acquire American Express Telecom Inc., which provides prepaid calling products. SmarTalk also formed a marketing and technology agreement with American Express Telecom’s parent company, American Express Co., for a total transaction of $44 million in cash.
The acquisition gives SmarTalk ownership of American Express Telecom’s products and existing distribution, which includes the FirstClass PhoneCard, sold through the U.S. Postal Service, and the PhoneFunds card sold through the National Park Foundation and certain American Express travel service offices.
SmarTalk will have exclusive access to the American Express point-of-sale system for activating and recharging prepaid phone cards under the marketing and technology agreement. This allows an encoded magnetic stripe to be placed on SmarTalk phone cards that will be recognized by merchants accepting American Express.
SmarTalk also will become the exclusive provider of a co-branded prepaid calling card marketed to selected segments of the American Express cardmember base. The agreement also allows SmarTalk to use the American Express logo on the co-branded prepaid cards, said Billy Kahn, SmarTalk vice president of corporate communications. SmarTalk plans to work with the American Express sales and marketing organizations to design additional programs that can be offered through a variety of other distribution channels, such as statement stuffers and direct mailings, Kahn said.
The deal could close within the next three months.
