Disposal of North American Subsidiary

 

TIDMFTS 
 
RNS Number : 7827X 
F.T.S-Formula Telecom Solutions Ltd 
10 December 2010 
 
          FTS Announces Sale of its North American business to PAETEC 
FAIRPORT, N.Y. and Herzliya, Israel | December 10, 2010 | PAETEC Holding Corp. 
(NASDAQ GS: PAET), a FORTUNE 1000 company, and FTS Ltd. (LSE: FTS), a global 
provider of billing, customer care and policy control solutions for 
communications and content service providers, announced that PAETEC's 
wholly-owned subsidiary, PAETEC Software Corp. (PAETEC Software) has signed a 
definitive agreement to acquire the entire assets and assume certain liabilities 
of Formula Telecom Solutions, Inc., a wholly-owned subsidiary of FTS, in a $13 
million all-cash transaction. The purchase is expected to close in late December 
of 2010. 
PAETEC is a leading national communications carrier in the United States that 
provides voice and data solutions to business-class customers. FTS Inc.'s Leap 
RevChain is considered one of the strongest billing platforms in the 
telecommunication industry and has been PAETEC's primary billing system since 
its inception in 1998.   Upon the closing of this transaction, the Leap RevChain 
billing system will be the heart of the new RevChain Solutions division of 
PAETEC Software.  The RevChain Solutions division expects to continue investing 
in the development of high performance invoicing solutions for businesses, 
institutions and carriers. 
"We've been using the Leap RevChain billing system for over 12 years.  Acquiring 
the system and its loyal development and support teams not only protects our 
supply chain, but also offers us an opportunity to continue to innovate the 
product and grow revenue to the benefit of all Leap RevChain customers," said 
PAETEC Executive Vice-President and Chief Information Officer, Robert Moore. 
"Our customers tell us that we have the simplest and most useful invoice in the 
industry, primarily due to the power and capabilities of Leap RevChain." 
"PAETEC was always a great customer of FTS Inc.," said Amos Sivan, FTS' CEO. 
"They have clearly seen the potential in the Leap RevChain solutions and we're 
delighted that they will be building on the great work we have done. This deal 
is a testament to the hard work and dedication of the great team we built at FTS 
Inc." 
The company was started in 1991 as Daleen Technologies and was later renamed as 
Viziqor Solutions.  FTS bought Viziqor, subsequently renamed to Formula Telecom 
Solutions, Inc., in December 2005 and ran the business, which primarily targeted 
service providers in the North American market, successfully and profitably 
until the sale to PAETEC. The employees of the RevChain Solutions division of 
PAETEC Software will continue to be based primarily out of Boca Raton, Florida. 
The sale of FTS Inc.'s assets is evidence of FTS' ability to successfully work 
in new markets and to make highly successful solutions for the billing industry. 
 Following the sale of FTS Inc., from its Israel headquarters, FTS will continue 
to offer solutions that will assist leading carriers to increase both revenues 
and customer satisfaction, as well as use their BSS as an enabler to drive the 
creation of new products and services. 
For the year ended 31 December 2009 Formula Telecom Solutions, Inc., had 
turnover of $7.9m and profit before taxation of $1.5m.  Net assets as at 31 
December 2009 were $0.8m. 
 
Notes to Editors 
On December 9 2010, FTS, its fully owned US subsidiary Formula Telecom Solutions 
Inc (FTS Inc) and PAETEC Holding Corp. (NASDAQ GS: PAET) entered into a 
definitive asset purchase agreement, pursuant to which PAETEC has agreed to 
acquire the entire assets and assume certain liabilities of FTS Inc for a total 
purchase price of $13 million in cash. The price excludes the cash and cash 
equivalents. Price shall be subject to a post closing price adjustment based on 
an agreed working capital acquired by PAETEC. 
The transaction under the Asset Purchase Agreement (the agreement) is expected 
to close in late December of 2010. The agreement includes customary 
representations, warranties and covenants made by the parties for similar 
transactions. Representations and warranties are used to allocate risk between 
the respective parties to the agreement, including in cases in which the parties 
may not have complete knowledge of all relevant facts. Furthermore, certain of 
the representations and warranties in the agreement are subject to standards of 
materiality. 
                                      ### 
 
About PAETEC 
PAETEC (NASDAQ: PAET) 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. 
 
About FTS 
FTS (LSE: FTS) is a leading provider of billing, customer care and policy 
control solutions for communications and content service providers. By analyzing 
events from a business standpoint rather than just billing them, FTS allows 
providers to better understand their customer base and leverage business value 
from every event and interaction. FTS deploys its full range of end-to-end, 
stand-alone and add-on solutions to customers in over 40 countries and 
implements solutions in wireless, wireline, cable, content and broadband markets 
including multiple cross-network installations. Serving the evolving needs of 
telecommunications providers, the company's operations comprise international 
R&D locations and strategically-located sales support offices worldwide. Further 
information is available at www.fts-soft.com. 
 
For further information please contact: 
 
+-----------------------------+--------------------------+---------------------+ 
| PAETEC Media Contact        | PAETEC Investor          | FTS Media Contact   | 
| Chris Muller                | Contact                  | Moshe Peterfreund   | 
|  [phone]             | Pete Connoy              | [phone]     | 
| [e-mail]     |  [phone]          | [e-mail]  | 
|                             | [e-mail]  |                     | 
| [e-mail]     |                          | [e-mail]  | 
|                             | [e-mail]  |                     | 
+-----------------------------+--------------------------+---------------------+ 
| Joshua PR for FTS           | Seymour Pierce Limited                         | 
| Patrick Smith               | Mark Percy                                     | 
| [phone]            | [phone]                            | 
| [e-mail]  | [e-mail]                    | 
|                             |                                                | 
| [e-mail]  | [e-mail]                    | 
+-----------------------------+--------------------------+---------------------+ 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
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