Mercator Partners Acquisition Corp. announced that it will acquire two virtual network operators – United Kingdom-based European Telecommunications and Technology Ltd. (ETT) and McLean, Va.-based Global Internetworking Inc. (GII).
The total purchase price for the companies is approximately $63.1 million, which is comprised of approximately $51 million in cash and $12.1 million in notes and securities, valuing the securities at their last sale price as of May 23, 2006. After giving effect to the completion of the acquisitions and including the automatic conversion of its Class B common stock into ordinary common stock, the company will have 13,030,100 shares of common stock outstanding, of which approximately 90 percent will be owned by its current shareholders.
The combined client roster includes more than 200 customers, such as Airbus, Bloomberg, Citigroup, Comsat International, Deloitte, Equant, Ford, Tandberg Television, WPP, as well as various U.S. government contractors and federal agencies. By the end of 2005, the combined company had pro forma revenue of approximately $50 million.
Virtual network operators (VNOs) are facilities-free, technology-agnostic telecommunications providers that leverage the infrastructure of multiple asset-based carriers to create highly customized, cost-effective and ubiquitous solutions for large enterprise, government and carrier customers.
H. Brian Thompson, chairman of Mercator Partners, stated, "The business combination of Mercator Partners with ETT and GII will create a global leader in the rapidly growing VNO telecommunications sector, and a powerful platform to grow organically and through acquisitions. ETT and GII are highly complementary and together will have services deployed with customers in over 50 countries worldwide and over 100 carrier partnerships, giving the new company global reach." Thompson will serve as executive chairman of the combined company.
Mercator Partners will change its name to Global Telecom and Technology Inc. (GTT) and submit an application to list the securities of GTT on the Nasdaq National Market upon receiving requisite approval by Mercator Partners' shareholders.
The combined company will be headquartered in McLean with additional locations in Dusseldorf, Germany; London; Miami; New Delhi, India; New York and Paris. Network operations centers will be based in both the United States and United Kingdom
Michael Keenan, co-founder and CEO of GII, will serve as CEO. "As mission-critical communications services requirements become more diverse and complex, there is burgeoning customer demand for carrier-independent and technology-neutral solutions from a single, customer-focused provider. The business combination of Mercator Partners, GII and ETT creates a global telecommunications platform with the resources, capabilities and technology to deliver cost-effective, best of breed solutions and support to customers on a global basis," said Keenan.
ETT’s CEO, Christopher Britton, who will serve as executive vice president and head of EMEA operations, added, "This business combination results in a powerful company with a global VNO footprint, greater capital access and world-class management. Greater access to capital and a U.S.-listed stock will afford us opportunities to accelerate the growth of the combined business. The VNO sector is not only growing rapidly but is also highly fragmented with many attractive acquisition candidates."
European Telecommunications and Technology Ltd. www.et-t.net
Global Internetworking Inc. www.globalinternetworking.com
Mercator Partners Acquisition Corp. www.mercatorcapital.com
