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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 -
-
NTS Adds State-Of-The-Art, Fiber-To-The-Premise-Network With Unique Voice,
Cable
and Data “Triple Play” Offering -
- 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.
-1-
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
“triple play” offering to residential and business customers.
Guy
Nissenson, President and CEO of XFONE stated, “This acquisition makes enormous
sense both economically and operationally. NTS contributes a
high-quality facilities-based telecommunications network; a solid base of loyal
customers; an effective sales and service operation and a 25 year history in
Texas. The addition of NTS is expected to substantially
increase our presence in the United States and provides multiple opportunities
to leverage the operational strengths of both companies. We expect to
drive EBITDA improvement as we integrate the operations.”
“NTS
has
grown through the years by providing innovative and effective offerings through
a broad range of telecommunications venues. We recognize the same
values and operating principles as the management of XFONE and believe that
this
is a good opportunity for NTS to continue growing and improving the services
available to our customers,” said Barbara Baldwin, President and CEO of NTS
Communications.
