Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev | Next
Author: TMFNico Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 31  
Subject: WCOM Press Release Date: 9/8/1997 6:32 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Monday September 8 5:50 AM EDT
Company Press Release
Source: WorldCom, Inc.

WORLDCOM TO ACQUIRE COMPUSERVE AND AOL'S NETWORK SERVICES COMPANY, ANS COMMUNICATIONS, IN $1.2 BILLION INTERNET TRANSACTION

UUNET To Create Powerful Combination of Internet Networks and Services

Company Signs Long-Term Contracts To Become AOL's Largest Network Provider

WorldCom To Sell CompuServe Consumer On-Line Services To AOL

JACKSON, Miss., Sept. 8 /PRNewswire/ -- WorldCom, Inc. (Nasdaq:WCOM), today announced that it has agreed to acquire CompuServe from H&R Block in a stock for stock transaction. Under the terms of the agreement, each share of CompuServe stock will be converted into .40625 shares of WorldCom stock. At Friday's closing, the value of the transaction was approximately $1.2 billion. The agreement was unanimously approved by the Board of Directors of each company.

Additionally, WorldCom has agreed to acquire ANS Communications from America OnLine (AOL), which will also sign a five year contract under which WorldCom will become AOL's largest network service provider, in exchange for AOL receiving CompuServe's Interactive Services Division and $175 million in cash. WorldCom will retain the CompuServe Network Services (CNS) division.

CompuServe Network Services (CNS)

CNS owns and operates one of the largest and farthest-reaching data communications networks in the world. It comprises approximately 100,000 dial-up "ports" (a single port can support one dial-up user at a time) and has a presence in 105 countries around the world. CNS provides value-added networking services, such as corporate intranets, transaction processing, and electronic commerce services to more than 1,200 high-end corporate customers through a sales force of more than 400 professionals with specialized training and technical expertise.

AOL's Advanced Networks and Services (ANS)

ANS operates one of the largest Internet networks, primarily on behalf of its current parent company, AOL. In addition, ANS focuses on providing high value-added Internet solutions to large business customers. ANS was originally formed to build and operate the U.S. National Science Foundation's backbone network for researchers and scientists, the origin of the Internet. The company then played a leading role in the Internet's transformation to a mission critical tool being used by businesses worldwide today.

Positions WorldCom for Changing Marketplace

"We believe these moves further distance us from all of the traditional carriers, as we continue to build a different kind of communications company," said Bernard J. Ebbers, WorldCom President and CEO. "Following our successful merger with MFS and UUNET, this transaction underscores our belief that the communications marketplace has fundamentally changed. In this new world, customers are demanding increasingly advanced Internet and data networking services. These acquisitions will further strengthen and broaden our Internet business. This is a transaction which will contribute significantly to our revenue and growth and is expected to be accretive to earnings."

"We are excited about the prospect of forming this strategic relationship with AOL, the leading on-line service provider, and we welcome the prospect of Steve Case, CEO of AOL, joining our Board of Directors."

Steve Case, Chairman and CEO of AOL, said: "We believe our long-term network capacity agreement with WorldCom lays the foundation for a strong and productive partnership between our two companies, including working together to develop broadband solutions in the future. We look forward to working together with WorldCom for years to come."

Financial and Strategic Benefits to WorldCom

Through its UUNET subsidiary, WorldCom already holds a leading position in the global Internet market, and the transactions announced today further strengthen and broaden that position -- particularly with respect to its value-added product and services portfolio. The transaction yields numerous financial and strategic benefits to the company. The transaction:

-- Substantially increases revenues and revenue growth;

-- Continues WorldCom's recent revenue diversification in favor of the high-growth Internet, corporate data networking and international market segments;

-- Enables UUNET to benefit from the economies of scale inherent in sharing our network infrastructure with ANS and CNS;

-- Complements UUNET's core Internet access and hosting services with ANS and CNS value-added product lines, and associated sales channels; and

-- Enables ANS and CNS to leverage WorldCom's global transmission assets within their product lines, thus making those products more competitive.

WorldCom's UUNET Enhances Position as World's Leading Commercial ISP

"We think these moves position WorldCom and UUNET at the forefront of the Internet world," said John Sidgmore, WorldCom Vice Chairman and Chief Operations Officer, and UUNET CEO. "Not only will the transaction generate significant revenues, it will yield crucial economies of scale, which will augment our ability to compete with new Internet entrants, such as the RBOCs. Through these acquisitions, we will be able to provide our business customers with the broadest range of Internet services available, over the broadest and most geographically far reaching infrastructure available."

The core network infrastructures of both ANS and CompuServe, together with UUNET's existing dial network, create the most significant Internet network in the world with more than half a million dial access ports. Ensuring the highest quality of service to customers will be a top priority. The combination of network infrastructures will be used by AOL and CompuServe as well as by existing UUNET customers including Microsoft and many others. UUNET will also gain the business traffic of CNS' and ANS' more than 1,600 commercial customers. In addition, the acquisitions expand UUNET's value- added product offerings to include corporate Intranets, managed network services, frame relay services, security monitoring, groupware hosting, transaction services, and electronic commerce.

The CompuServe transaction is subject to CompuServe shareholder approval, Hart-Scott-Rodino review and other customary closing conditions. H&R Block, which owns approximately 80 percent of CompuServe's stock, has agreed to vote its shares in favor of the transaction and granted WorldCom a proxy to vote such shares in connection with the CompuServe stockholders' meeting. H&R Block also granted WorldCom an option to acquire such shares.

Except for the historical information contained herein, the matters discussed in this news release are forward looking statements that involve risk and uncertainties as detailed from time to time in various regulatory filings. Actual results may vary significantly from these statements.

WorldCom is a global business telecommunications company. Operating in more than 50 countries, the company is a premier provider of facilities-based and fully integrated local, long distance, international and Internet services. WorldCom's subsidiary, UUNET Technologies, Inc., is an international provider of Internet services with over 1,000 Points of Presence (PoPs) throughout the United States and in Canada, Europe and the Asia-Pacific region. WorldCom's World Wide Web address is http://www.wcom.com. The common and depositary shares of WorldCom trade on the Nasdaq national market (US) under the symbols WCOM and WCOMP, respectively.

SOURCE: WorldCom, Inc.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev | Next

Announcements

Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Dividend Growth Investing

Good Time for Dividend Champions?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement