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EX-99.2 - EXHIBIT 99.2 - XETA TECHNOLOGIES INC | c12124exv99w2.htm |
8-K - FORM 8-K - XETA TECHNOLOGIES INC | c12124e8vk.htm |
Exhibit 99.1
PAETEC Media Contact
|
PAETEC Investor Contact | |
Chris Muller
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Pete Connoy | |
585.340.8218
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585.340.2649 | |
christopher.muller@paetec.com
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peter.connoy@paetec.com | |
XETA Technologies Media Contact
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XETA Technologies Investor Contact | |
Waller & Company Public Relations
|
Three Part Advisors, LLC | |
Barrett Waller
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Dave Mossberg | |
918.587.1909
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817.310.0051 | |
barrett@wallerpr.com
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dmossberg@threepa.com |
FOR IMMEDIATE RELEASE
PAETEC Holding Corp. to Acquire XETA Technologies
Acquisition builds on PAETECs strategy of offering comprehensive, managed service
solutions to meet the diverse needs of Chief Information Officers
solutions to meet the diverse needs of Chief Information Officers
Enhances and strengthens the complete communication solutions for both XETA and
PAETEC customers nationwide
PAETEC customers nationwide
Transaction combines XETAs strength as a one of the nations largest solutions services
providers for Managed Information Technology with PAETECs coast-to-coast network,
strong enterprise customer base, and deep product portfolio
providers for Managed Information Technology with PAETECs coast-to-coast network,
strong enterprise customer base, and deep product portfolio
FAIRPORT, N.Y. and BROKEN ARROW, Okla. February 9, 2011 PAETEC Holding Corp. (NASDAQ GS:
PAET) today announced that it has signed a definitive agreement to acquire XETA Technologies, Inc.
(NASDAQ GM: XETA) for $5.50 per share in cash valued at approximately $61 million.
Founded in 1981, XETA Technologies sells, installs and services advanced communication technologies
for enterprise customers. XETA is among the largest full-service, providers of advanced
communications solutions with 32 locations and
redundant 24/7 customer contact and data network operating centers. At the time of the Avaya and
Nortel merger, XETA was the only national provider with the highest accreditations from both
companies, and will expand on those relationships with PAETECs existing platinum partnership with
Avaya. XETAs national coverage is ideally suited to serve large, multi-locations organizations
such as PAETECs enterprise network customer base.
Consistent with PAETECs vertical strategy for over a decade, XETA has a strong focus on vertical
industries including the Hospitality, Education, Healthcare, and Government sectors. As part of
that focus, XETA has developed customized products and services including software solutions,
proactive monitoring and remediation, guest and back-of-the-house support services for hospitality
customers, as well as professional services.
XETA will also become part of PAETECs robust Managed Services portfolio, consisting of products
such as hosted services, service lifecycle management software and Allworx IP-PBXs.
This transaction highlights our strategy to increase our capabilities to service enterprise CIOs
beyond traditional telecom products with advanced managed services and cloud computing solutions,
said Arunas A. Chesonis, chairman and CEO of PAETEC. PAETEC and XETA have a consistent national
footprint and customer base while offering complementary services. As a result of this transaction
and combined portfolios, both companies will have far stronger value propositions for our
customers.
For XETA Technologies 2010 fiscal year ended Oct. 31, 2010, the company reported revenue of $85.7
million. For fiscal year 2011, XETA expects to generate over $100 million in revenue. After the
closing of the transaction, PAETEC plans to have approximately 5,100 employees nationwide.
After a thorough review of our strategic alternatives, our Board of Directors has unanimously
determined that this transaction provides XETA shareholders a superior and certain value, said
Greg Forrest, CEO and president of XETA Technologies. We have a 30 year history of delivering best
in class services to our customers. With the
expanded scale and scope of PAETEC, the value proposition to our customers, vendors and business
partners has never been stronger.
Transaction Terms and Structure
Under the terms of the merger agreement, which was approved by the boards of directors of both
companies, XETA Technologies, Inc. will become an indirect wholly-owned subsidiary of PAETEC
Holding Corp. Neither the merger agreement nor the merger is subject to the approval of PAETECs
stockholders. The merger agreement is subject to the approval of XETAs shareholders and other
customary closing conditions. The companies expect that the transaction will close within three
months.
Based on the 10,762,1911 common and restricted shares issued and outstanding and the
cashing-out of certain issued stock options and warrants, the aggregate equity value of this
transaction is approximately $61 million. Based on net debt as of October 31, 2010 of $1.5 million,
the aggregate enterprise value of this transaction is approximately $63 million.
Additional information about the transaction will be contained in public filings of XETA or PAETEC
filed with the SEC.
Advisors
Stephens Inc. is acting as financial advisor to PAETEC and Harter, Secrest & Emery is acting as
legal counsel to PAETEC. Stifel Nicolaus Weisel is acting as financial advisor and Barber & Bartz
and Mayer Brown are acting as legal counsel to XETA.
About PAETEC
PAETEC (NASDAQ: PAET), a FORTUNE 1000 company, is personalizing business communications for medium
and large businesses, enterprise organizations and institutions across the United States. We offer
a comprehensive suite of IP, voice, data, and Internet services, as well as enterprise
communications management software, network security solutions, CPE, and managed services. For
more information, visit www.paetec.com.
1 | This amount was incorrectly listed as 19,730,236 shares as of December 17, 2010 in XETA Technologies most recent Annual Report on Form 10-K. |
About XETA Technologies, Inc.
XETA Technologies, Inc., sells, installs and services advanced communication technologies for
small, medium and Fortune 1000 enterprise customers. XETA maintains the highest level of technical
competencies with multiple vendors, including Avaya/Nortel, Mitel, Hitachi, Samsung, HP, Polycom,
Microsoft, Alcatel-Lucent, ShoreTel, LifeSize and Juniper. With a 29-year operating history and
over 16,000 customers from coast to coast, XETA has maintained a commitment to extraordinary
customer service. XETAs in-house 24/7/365 contact center, combined with a nationwide service
footprint, offers customers comprehensive equipment service programs that ensure network
reliability and maximized network up-time. More information about XETA Technologies (Nasdaq
GM:XETA) is available at www.xeta.com. Click on the following link to join our e-mail alert list:
http://www.b2i.us/irpass.asp?BzID=1585&to=ea&s=0.
Forward-Looking Statements
Except for statements that present historical facts, this release contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. In some cases, you can identify these statements by such
forward-looking words as anticipate, believe, could, estimate, expect, intend, may,
plan, potential, should, will and would, or similar expressions. The forward-looking
statements reflect preliminary estimates based on current information and assumptions, and
represent PAETECs and XETAs judgment only as of the date of this press release. Forward-looking
statements involve known and unknown risks, uncertainties and other factors that may cause actual
operating results, financial position, levels of activity or performance to be materially different
from those expressed or implied by such forward-looking statements. The risks include those
related to PAETECs acquisition and integration of XETA, such as the ability of PAETEC and XETA to
consummate the acquisition, and PAETECs ability to integrate the operations of XETA without
greater than expected costs and burdens on management . Some of the other risks, uncertainties and
factors are discussed under the caption Risk Factors in PAETECs 2009 Annual Report on Form 10-K
and in PAETECs subsequently filed SEC reports, and under the caption Risk Factors in XETAs
Annual Report on Form 10-K for the fiscal year ended October 31, 2010, as amended, and in XETAs
other SEC reports. They include, but are not limited to, the following risks,
uncertainties and other factors: general economic conditions and trends; the continued availability
of necessary network elements at acceptable cost from competitors; changes in regulation and the
regulatory environment; industry consolidation; the companies ability to manage their businesses
effectively; competition in the markets in which PAETEC operates; failure to adapt product and
service offerings to changes in customer preferences and in technology; PAETECs ability to
integrate the operations of acquired businesses; PAETECs ability to implement its acquisition
strategy; any significant impairment of PAETECs goodwill; future sales of PAETECs common stock in
the public market and PAETECs ability to raise capital in the future; interest rate risks and
compliance with covenants under PAETECs debt agreements; the companies ability to attract and
retain qualified personnel and sales agents; the companies failure to obtain and maintain network
permits and rights-of-way; their involvement in disputes and legal proceedings; PAETECs ability
to maintain and enhance its back office systems; and effects of network failures, system breaches,
natural catastrophes and other service interruptions. PAETEC and XETA each disclaim any obligation
to update any forward-looking statements, whether as a result of new information, future events or
otherwise.
Additional Information About the Proposed Transaction and Where to Find It
In connection with the proposed transaction, XETA will file proxy materials (including a proxy
statement and other relevant materials) with the Securities and Exchange Commission. Before making
any voting decision, investors and shareholders are advised to read the proxy statement regarding
the merger and any other relevant documents filed with the SEC when they become available. Those
documents will contain important information about the proposed merger and XETA.
Investors and shareholders may obtain free copies of the proxy statement and other documents filed
by XETA (when available) at a website maintained by the SEC at http://www.sec.gov. In addition,
documents filed by XETA with the SEC will be available free of charge at the investor relations
portion of the companys website at http://www.xeta.com. The proxy statement and such other
documents may also be obtained, when available, for free from XETA by directing such request to
XETA Technologies, Inc., 1814 W. Tacoma Street, Broken Arrow, Oklahoma 74102.
Participants in the Solicitation
XETA and its directors, executive officers and other members of its management and employees may be
deemed to be participants in the solicitation of proxies from XETAs shareholders in connection
with the proposed merger transaction. The names of the companys directors and executive officers
and a description of their interest in the company are set forth in XETAs proxy statement relating
to its 2010 annual shareholder meeting which was filed with the SEC on February 26, 2010 and in its
annual report on Form 10-K for the fiscal year ended October 31, 2010 which was filed with the SEC
on January 25, 2011 and amended on January 28, 2011. Investors and shareholders can obtain more
detailed information regarding the direct and indirect interests of the company directors and
executive officers in the merger transaction by reading the proxy statement when it becomes
available.
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