The growing appeal of wireless services Wednesday worked to lure Intellicall, Inc. into purchasing a
national wire-free Internet service provider.
In a strategic move to enter the wireless data arena, Intellicall signed a definitive agreement to acquire Wireless WebConnect, Inc.
To fund the merger Intellicall plans to issue more than 16.4 million shares
of Intellicall common stock, making the deal worth more than $133 million,
based of yesterday’s market close.
Intellicall has been shifting gears, moving away from its core competence
as a leading manufacturer of advanced public access telecommunications
systems and intelligent payphones, toward ventures with wireless firms to
expand its depth in telecom technologies.
Founded in 1984, Intellicall has actively been seeking opportunities to
strategically realign its business with due to deregulation of the global
telecom market. On July 12 Intellicall sold its N-GENIUS business segment
to Homisco-VoiceNet, Inc., a turnkey
wireless and wireline software-based platform provider for telecom networks.
Later in July, Intellicall executives nixed its planned merger with Heads Up Technologies. Intellicall had
announced plans in January to acquire the Texas-based maker of interactive
digital products for the aviation, transportation and entertainment
industries in an all-stock transaction.
Changing business dynamics that occurred during the negotiation process
made the deal less attractive for both companies. Intellicall rededicated
its efforts to pursue strategic marketing opportunities in order to move
away from its reliance on the stagnant public access communications market
segment.
At the time, John McDonald, Intellicall president and chief executive
officer said it would continue Intellicall’s efforts to reposition its core
business around new and profitable technologies.
“We intend to move quickly to capitalize on opportunities that will make us
a stronger company,” McDonald said.
About a month later, Intellicall did just that, by moving to merge with
Wireless WebConnect. Intellicall’s McDonald said the deal is clearly is the
opportunity it’s desired.
“Wireless WebConnect is an outstanding organization with a strong
entrepreneurial spirit,” McDonald said. “It has planted its flag in the
wireless data arena, and this merger signals powerful opportunities for
both companies to expand and enter new markets in this burgeoning space.”
G. T. Finn, Wireless WebConnect chief executive officer said the firm looks
forward to expanding the scope and support of its wire-free offerings.
“Together, we’re charging into new markets as a more powerful combined
organization,” Finn said. “Combining forces with Intellicall enables
Wireless WebConnect to further strengthen our marketing of wireless access
services to mobile professionals.
Wireless WebConnect, formerly knows as Business Tel, and was primarily
operating as a wireless solutions provider for the past five years. The
firm changed its name earlier this year when it decided to focus on
providing mobile wireless data access to business professionals. It struck
a deal to distribute Ricochet mobile access with Metricom, Inc. in June.
Metricom credits Wireless WebConnect with signing up
more “road warriors” for its high-speed wireless data services than any
other company to date.
John Wernke, Metricom senior vice president of marketing and sales, said
Wireless WebConnect has been a strong partner for it and the Intellicall
merger bodes well for its future success.
“By aggressively moving to expand their business, Wireless WebConnect is
signa
ling to partners like us that it is unwaveringly committed to serving
the wireless access market,” Wernke said.
“I am encouraged by the growth and success of our outstanding resellers
like Wireless WebConnect,” Wernke added, “which at the end of the day
creates greater opportunity to bring Ricochet to market and satisfy the
high-speed mobile access needs of more customers.”
The Ricochet WebConnect service uses a lightweight wireless modem that
connects to a universal serial bus or serial port for desktop, laptop and
handheld connectivity. Ricochet WebConnect provides wireless mobile access
to corporate networks and mobile users at speeds of 128 kilobits per second.
The Intellicall, WebConnect merger is subject to certain conditions,
including approval by Intellicall’s stockholders and satisfactory
completion of due diligence. When the deal is done, WebConnect will operate
as a wholly owned subsidiary of Intellicall.
