Has completed a Letter of Intent to acquire 100% of an additional VoIP services company providing services to small and medium enterprises in the United States. Definitive agreements will be completed by end of April and following successful completion of the necessary due diligence the transaction is expected to close in the Flint's last financial quarter on June 30, 2011.
The company being acquired is profitable with annual revenues in excess of $1.5 million. When consolidated with the other pending acquisitions, operating costs will be reduced due to shared common services and network cost reductions that are expected to improve the acquired company's net income by about a third.
Fierce VoIP magazine quotes the recent Federal Communications Commission (FCC) study showing VoIP usage by businesses and consumers increased 21 percent between 2009 and 2010. The FCC's Local Telephone Competition report indicates that IP communications is on the rise with 21 million end-users taking advantage of VoIP subscriptions from cable, traditional telcos or VoIP providers. The report noted that there were 162 million wireline retail local telephone service connections as of the end of 2008. Of that figure, 21 million were VoIP subscribers. With the FCC's plans for the all-IP network, these numbers may be shifting more in the coming years.
Bernie Fried, President and COO of Flint Telecom Group, commented, "This is the second in a line of acquisitions we are actively pursuing to achieve our target of ten acquisitions this year, creating a highly profitable business unit delivering integrated voice, data and wireless services to small and medium sized enterprises with expected annual revenues in excess of $20 million. These two acquisitions already account for approximately $5 million of that target. By consolidating multiple operations under one roof, operating costs are unified and reduced to deliver higher profits from these existing revenue streams."
Vincent Browne, Chairman and Chief Executive of Flint Telecom Group, said "This is another step in our goal to become operationally profitable this year and to build on our vision of increasing shareholder value in the most cost effective way. Our focus is on creating profitable business segments each addressing high growth markets both domestically and internationally. We are focused on two major market areas, telecommunication services and mobile money transfer and payments. Our operating companies address segments of these areas that provide existing customers for the services offered by the others, thereby reducing our market entry and sales costs. The market for these services continues to grow rapidly as the use of smartphones becomes commonplace allowing us to offer exciting integrated telecom products both fixed and wireless and to also integrate mobile payments to the same customer groups. We look forward to completing these transactions in our current financial year so that the benefits can be felt early in the next financial year."