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Exhibit 99.1
For Immediate Release
XFONE, INC. Signs Definitive Agreement to Acquire Texas-Based NTS
Communications; Combined Annualized Revenues and EBITDA Exceed $114
Million and $13 Million, Respectively
- Acquisition Will Dramatically Increase XFONE’s Scale
With Significant Opportunities To Drive Operating Synergies
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- NTS Adds State-Of-The-Art, Fiber-To-The-Premise-Network With
Unique Voice, Cable and Data “Triple Play” Offering
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- Combination With Mississippi/Louisiana Based Xfone
USA Dramatically Expands Xfone’s Reach with Opportunity for
Additional, Innovative Services -
Jackson, Mississippi – August 23, 2007 – XFONE, Inc.
(AMEX and TASE: XFN) announced that it has signed a
definitive agreement to acquire NTS Communications, Inc., a premier
provider of integrated voice, data and video solutions,
headquartered in Lubbock, Texas. The acquisition is
expected to significantly expand XFONE’s service area and
creates a diversified communications services company with combined
annualized revenues and EBITDA (Earnings Before Interest, Taxes,
Depreciation and Amortization) exceeding $114 million and $13
million, respectively based upon the first six months of 2007
unaudited results. The acquisition is expected to
dramatically enhance XFONE’s revenues, cash flows, and
profitability while concurrently positioning the company to take
advantage of significant opportunities to drive future growth and
profits through innovative service offerings and operating
synergies.
The
purchase price for the acquisition is $42 million (excluding
acquisition related costs). Given the strong cash
flow and balance sheet of the combined company, XFONE expects
to finance the acquisition primarily with debt financing and
is currently in discussions with potential lenders to close a
financing in conjunction with the consummation of the
acquisition.
Completion
of the acquisition is subject to certain conditions, including
receipt of regulatory approvals where relevant.
NTS
operates the largest “non-ILEC” telecommunications
network in West Texas, providing local, long distance,
broadband data, video and private line services to
approximately 47,500 residential and business
customers. Based upon NTS’s unaudited
six month results through June 30, 2007, NTS generated
annualized revenues and EBITDA of approximately $68 million
and $9.1 million, respectively.
NTS
is regarded as the leading competitive telecommunications
provider in the West Texas markets it serves; including
Lubbock, Amarillo, Midland/Odessa, Abilene, Wichita Falls,
Pampa and Plainview. NTS operates through 21 ILEC
central office collocation sites within its core areas and
provides nationwide private line and regional long distance
service as well as statewide, Midwest and northwest regional
services to customers beyond its own network facilities
through a variety of inter-carrier
arrangements. NTS serves a diverse and stable
customer base that includes financial institutions, energy
companies, medical enterprises, and governmental and
educational entities. NTS’s focus on superior
customer care and account management has been rewarded by high
customer satisfaction and low customer churn.
NTS
has invested over $23 million in developing a
Fiber-to-the-Premise platform, which enables unique economies
and allows NTS to provide a voice, data and cable
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