HERNDON, Va., Nov. 11, 2010 /PRNewswire-FirstCall/ -- Arbinet
Corporation (Nasdaq: ARBX) ("Arbinet"), a leading provider of
telecommunications services to fixed and mobile operators, today
announced that it has signed a definitive agreement to be acquired
by Primus Telecommunications Group Incorporated (OTC Bulletin
Board: PMUG) ("Primus"), a global facilities-based integrated
provider of advanced telecommunications products and services in a
stock-for-stock merger transaction.
Under the terms of the merger agreement, which has been approved
by the Board of Directors of Arbinet, upon recommendation by its
special committee which was appointed to evaluate the advisability
of the transaction, and by the Board of Directors of Primus,
Arbinet common shareholders will receive shares of Primus common
stock in exchange for the Arbinet common stock they own. The
transaction is valued at an aggregate value of approximately
$28 million. Based on the
companies' current capitalization, Arbinet shareholders will be
expected to own approximately 23% of the combined company, and
Primus shareholders will be expected to own approximately 77% of
the combined company upon the closing of the transaction.
The agreement contains a go-shop provision under which Arbinet
may solicit alternative proposals from third parties during the
next 45 calendar days. There can be no assurances that this
process will result in an alternative transaction.
Upon closing, Primus intends to integrate Arbinet's operations
into its Global Wholesale Group. On a pro forma basis,
Primus' Wholesale business unit is expected to generate over
$500 million in annual revenue and
bring Primus' total consolidated annual run rate revenue to over
$1 billion. The combined
company is expected to be ranked among the top 12 leading
international telecommunications carrier service providers in the
world based on annual revenues, is expected to be well positioned
to capitalize on its long established experience in carrier telecom
operations and to expand its global voice and data operations to
meet the evolving demands of telecom operators worldwide.
With its enhanced scale and market position, the combined
company is expected to enable wholesale customers to access
additional networks and termination routes at competitive rates.
The combined company is expected to have a diversified
product portfolio of international voice and data services across
all wholesale customer segments. The anticipated increased
global reach is expected to provide additional market opportunities
for retail and carrier wholesale interconnectivity. The
combined company would become the only major global provider to
offer wholesale customers options to either acquire direct
international connections through traditional interconnect
arrangements or manage their access needs through Arbinet's
Exchange.
Shawn O'Donnell, President and Chief Executive Officer of
Arbinet, stated, "While we have continued to make significant
progress in leveraging our unique suite of services to increase
customer traffic, pricing pressures and increased competition have
continued to affect our bottom line. As a result, our Board
examined a range of strategic alternatives and after careful
review, our Board unanimously concluded that our merger with Primus
is the best available option for our shareholders. We believe
this transaction will allow Arbinet to respond more effectively to
marketplace challenges through enhanced scale, expanded reach, and
improved products and services. In addition, we believe the
transaction will allow us to lower our operational costs and
benefit from significant synergies. As an all-stock
transaction, this combination provides our stockholders the
opportunity to participate in the upside potential of the combined
company. In sum, we have found a strong partner in Primus
with a complementary business, outstanding reputation and shared
values, and we believe Arbinet will thrive as part of the Primus
team."
Peter D. Aquino, Chairman,
President and Chief Executive Officer of Primus, stated, "With the
combined carrier services platforms and additional global reach
through Arbinet's Exchange, Primus gains access to additional
traffic streams, better routes for termination of voice traffic and
the ability to manage multiple segments of carrier customers.
Primus and Arbinet share great cultures of innovation and
customer service, and we are pleased to welcome Arbinet's customers
and employees to Primus."
The combined company will be led by Peter D. Aquino, Chairman, President and Chief
Executive Officer of Primus. Upon the closing of the
transaction, an integration team comprised of executives of both
companies will make recommendations on how best to organize the
combined company.
The Boards of Directors of both companies have approved the
merger agreement, which is subject to regulatory approvals and the
approval of the stockholders of both companies, among other
customary closing conditions. The transaction is expected to
close in the first quarter of 2011.
The BankStreet Group LLC is serving as Arbinet's financial
advisor, and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. is
serving as its legal advisor.
About Arbinet
Arbinet is a leading provider of international voice and IP
solutions to carriers and service providers globally. With more
than 1,100 carriers across the world utilizing the Arbinet network,
Arbinet combines global scale with sophisticated platform
intelligence, call routing and industry leading credit management
and settlement capabilities. Customers and suppliers include many
leading fixed line, mobile, wholesale and VoIP carriers, as well as
calling card, ISPs and content providers around the world who buy
and sell voice and IP telecommunications capacity and content. The
Company can be reached at its corporate headquarters in
Herndon, Virginia at (703)
456-4100 or by email at sales@arbinet.com.
About Primus
Primus Telecommunications Group, Incorporated is a leading
provider of advanced communication solutions, including traditional
and IP voice, data, mobile services, broadband Internet,
collocation, hosting, and outsourced managed services to business
and residential customers in the United
States, Canada,
Australia, and Brazil. Primus is also one of the
leading international wholesale service providers to fixed and
mobile network operators worldwide. Primus owns and operates its
own global network of next-generation IP soft switches, media
gateways, hosted IP/SIP platforms, broadband infrastructure, fiber
capacity, and data centers located in Canada, Australia, and Brazil. Founded in 1994, Primus is
headquartered in McLean,
Virginia.
Important Additional Information Will be Filed With the
SEC
This press release may be deemed to be solicitation material
regarding the proposed merger of Arbinet Corporation and Primus
Telecommunications Group Incorporated. In connection with the
proposed merger, Primus Telecommunications Group Incorporated
intends to file with the SEC a registration statement on Form S-4,
which will include a joint proxy statement/prospectus of Primus
Telecommunications Group Incorporated and Arbinet Corporation and
other relevant materials in connection with the proposed merger,
and each of Primus Telecommunications Group Incorporated and
Arbinet Corporation intend to file with the SEC other documents
regarding the proposed merger. The final joint proxy
statement/prospectus will be mailed to the stockholders of Primus
Telecommunications Group Incorporated and Arbinet Corporation.
INVESTORS AND SECURITY HOLDERS OF Primus Telecommunications Group
Incorporated and Arbinet Corporation ARE URGED TO READ THE JOINT
PROXY STATEMENT/PROSPECTUS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS
THERETO) AND THE OTHER RELEVANT MATERIAL CAREFULLY IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT Primus Telecommunications Group
Incorporated, Arbinet Corporation AND THE PROPOSED MERGER.
The joint proxy statement/prospectus and other relevant
materials (when they become available), and any and all documents
filed with the SEC, may be obtained free of charge at the SEC's web
site at www.sec.gov. In addition, investors and security
holders may obtain free copies of the documents filed with the SEC
by Arbinet Corporation by directing a written request to Arbinet
Corporation, 460 Herndon Parkway, Suite 150, Herndon, Virginia 20170, Attention: Investor
Relations, and by Primus Telecommunications Group Incorporated by
directing a written request to Primus Telecommunications Group
Incorporated, 7901 Jones Branch Drive, Suite 900, McLean, Virginia 22102, Attention: Investor
Relations.
Arbinet Corporation, Primus Telecommunications Group
Incorporated and their respective executive officers and directors
and other persons may be deemed to be participants in the
solicitation of proxies from the stockholders of Arbinet
Corporation and Primus Telecommunications Group Incorporated in
connection with the proposed merger. Information about the
executive officers and directors of Arbinet Corporation and their
ownership of Arbinet Corporation common stock is set forth in its
proxy statement for its 2010 annual meeting of stockholders, filed
with the SEC on April 30, 2010.
Information regarding Primus Telecommunications Group
Incorporated's directors and executive officers and their ownership
of Primus Telecommunications Group Incorporated common stock is set
forth in its proxy statement for its 2010 annual meeting of
stockholders, filed with the SEC on June 14,
2010.
Certain directors and executive officers of Arbinet Corporation
may have direct or indirect interests in the merger due to
securities holdings, pre-existing or future indemnification
arrangements and rights to severance payments if their employment
is terminated prior to or following the merger. If and to the
extent that any of the Arbinet Corporation and Primus
Telecommunications Group Incorporated participants will receive any
additional benefits in connection with the merger, the details of
those benefits will be described in the joint proxy
statement/prospectus relating to the merger. Investors and security
holders may obtain additional information regarding the direct and
indirect interests of Arbinet Corporation, Primus
Telecommunications Group Incorporated and their respective
executive officers and directors in the merger by reading the joint
proxy statement/prospectus regarding the merger when it becomes
available.
Forward-looking Statements
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995, including, but not limited to, statements relating to: the
timing and expected benefits of the proposed merger, including the
anticipated closing late in the first quarter of 2011, projected
pro form revenues of the combined company, the ranking of the
combined company relative to its peers, the combined company's
ability to capitalize on long-established experience in carrier
telecom operations, the enhanced scale and market position of the
combined company, expectations that customers of the combined
company would have access to additional networks and termination
routes at competitive rates, expectations that the combined company
would have a diversified product portfolio across all wholesale
customer segments, the additional market opportunities expected to
be realized as a result of the combined company's anticipated,
increased global reach, our beliefs that the transaction will allow
Arbinet to be compete more effectively due to enhanced scale, our
expectations regarding cost-savings expected to be derived from
realizing synergies in the combined company. These
"forward-looking statements" are based on management's current
expectations of future events and are subject to a number of risks
and uncertainties that could cause actual results to differ
materially and adversely from those set forth in or implied by
forward-looking statements. These risks and uncertainties include,
but are not limited to: the failure of the stockholders of Arbinet
Corporation or Primus Telecommunications Group Incorporated to
approve the merger or the failure of either party to meet any of
the other conditions to the closing of the merger; the failure to
obtain regulatory approvals of the transactions contemplated by the
merger agreement on the proposed terms and schedule; the failure to
realize the anticipated benefits from the merger or delay in
realization thereof; our ability to maintain relationships with
customers, employees or suppliers following the announcement of the
transaction; and the risk that the transactions contemplated by the
merger agreement may not be completed in the time frame expected by
the parties or at all. For a further discussion of the risks
and uncertainties we face, please refer to Part I, Item 1A of our
Annual Report on Form 10-K, for the year ended December 31, 2009, filed with the Securities and
Exchange Commission (SEC) on March 17,
2010 and other periodic and current filings that have been
filed with the SEC and are available at www.sec.gov. We assume no
obligation to update any forward-looking statements, whether as a
result of new information, future events or otherwise, and such
statements are current only as of the date they are made.
Contacts:
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Gary Brandt, Chief Financial
Officer
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Arbinet Corporation
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(703) 456-4140
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Andrea Rose / Jed
Repko
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Joele Frank, Wilkinson Brimmer
Katcher
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(212) 355-4449
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SOURCE Arbinet Corporation