Verso Technologies Inc. has closed its acquisition of NACT Telecommunications, Inc., a provider of next generation network solutions including softswitch-based gateways, billing systems and application technologies. Verso acquired NACT from WA Telcom Products Co. Inc., a wholly-owned subsidiary of World Access, Inc., in a stock purchase agreement.
Under the terms of agreement announced in early June, the Atlanta-based Verso purchased all of the outstanding capital stock of NACT for $19.5 million in cash with $14.2 million to be paid at closing and $5.3 million deferred until March of next year. An additional payment of up to $4.9 million may be due in March 2002 contingent upon NACT achieving certain revenue and product deployment goals for 2001.
In the second quarter of this year, NACT’s revenues were $4.9 million, reflecting sales of $6.4 million. The company recorded EBITDA (earnings before interest, taxes, depreciation and amortization) of approximately $536,000 in the second quarter.
Verso also announced that in connection with the definitive merger agreement with Telemate.Net, announced on May 7, Verso and Telemate.Net entered into a stock purchase agreement whereby Telemate.Net agreed to purchase up to $10 million of a new series of Verso preferred stock. The stock purchase agreement was modified on June 1 to increase the amount of the preferred stock investment to $15 million to fund the cash due at closing of the NACT transaction.
Upon the expected completion of Telemate.Net’s merger transaction with Verso, the preferred shares will be retired and will no longer be outstanding.
In acquiring NACT, Verso adds Voice over Internet Protocol (VoIP) technology to its existing portfolio of network management services, operations support systems integration, communications software applications and technical product support. The union of the two companies will allow Verso to deliver integrated switching solutions for communications service providers developing Internet Protocol (IP) based telephony services.
“We’ve reached a major milestone in leading Verso into the rapidly-growing softswitch market,” said Steve Odom, chairman and chief executive officer of Verso Technologies. “The economic conditions of the past year have made the road longer and more difficult than we had expected, but we continue to prevail and are now ready to realize our vision. There are incredible synergies between the two companies, as well as a shared passion for developing and delivering unique, proprietary technologies that enable our customers to solve critical business challenges. This transition marks the beginning of a new future for this company — for our customers, our employees and our shareholders.”
According to the telecom industry analyst group Frost & Sullivan, the global market for VoIP infrastructure equipment is expected to grow to $67.5 billion by 2005 from $1.8 billion in 2000, with more than half of the revenue growth coming from softswitches.