Primus Acquires C&W's US Voice Customers

September 16, 2002 -- Facilities-based service provider PRIMUS Telecommunications Group Inc. (PrimusTel.com) said on Monday that it has signed an agreement to acquire the United States0based retail switched voice customer base of Cable & Wireless USA, Inc.

The acquisition, says PRIMUS, is expected to generate up to $150 million in annual revenue for the company, depending on the number of customers who migrate to PRIMUS. The company will pay a fee to Cable & Wireless for every customer that migrates to PRIMUS, after the process is complete, based on that customer’s monthly usage.

The acquisition will take place through a deferred payment arrangement that will see an estimated consideration of up to $32 million given over a two-year period and, says PRIMUS, is also subject to FCC and applicable state PUC approval.

"The acquisition of Cable & Wireless's US retail voice customer base is an exact fit with PRIMUS's strategy for profitable growth," says K. Paul Singh, chairman and chief executive officer of PRIMUS. "Primarily consisting of desirable small- and medium-sized enterprise customers in one of our core markets, the acquired customer base could double the size of our U.S. retail business. The anticipated significant increase to our size and scale should enable us to achieve critical mass in the U.S., which will complement PRIMUS's most mature and profitable subsidiaries in Australia and Canada. We believe the acquisition will generate positive free cash flow within the first year, assuming the transition goes according to our expectations."