EXHIBIT 99.1
COMPANY NEWS
ON-CALL
SMARTALK(SM) TO ACQUIRE CONQUEST - STRATEGIC ACQUISITION ADDS 6,000 RETAIL
LOCATIONS
LOS ANGELES, July 31 /PRNewswire/ -- SMARTALK (SM) Teleservices, Inc.
(Nasdaq: SMTK) today announced the signing of a definitive agreement to acquire
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ConQuest Telecommunication Services Corp., a Dublin, Ohio-based developer and
marketer of prepaid calling cards and other enhanced telecommunications
services, including domestic and international calling services for the tour and
travel industry. Through a strategic merger with ConQuest, SMARTALK will add
more than 6,000 storefronts to its distribution channel, including Winn-Dixie,
Marathon Oil, SuperAmerica, Shoppers Food Warehouse, Pick Kwik Food Stores,
Spectrum Stores, Weis Markets, and Emro Marketing, which includes convenience
stores and service stations such as Speedway, Starvin' Marvin, United, Bonded,
Gastown, Cheker and Wake Up. The combined company will have a retail
telecommunications distribution channel with access to approximately 35,000
locations under existing distribution agreements.
In the tour and travel industry ConQuest provides long-distance and other
operator services to franchisees of Holiday Inn, Ramada Inn, Comfort Inns and
Days Inns. In addition, ConQuest provides promotional prepaid calling card
services to Catalina Marketing Corp. and Thomas & Howard for use in conjunction
with interactive promotions directed to supermarkets, chain drug stores and mass
merchandisers. ConQuest also provides enhanced call processing services to
long-distance carriers, advertisers and resellers, including a major utility
company in the United Kingdom. Additionally, ConQuest processes prepaid
wireless calls including prepaid cellular.
"This strategic merger will further strengthen SMARTALK's position as a
leader in the manufacturing and distribution of prepaid calling cards. It
expands our business by giving us increased presence in supermarkets,
convenience stores and service stations. ConQuest's experience in providing
operator assisted calling services in the tour and travel industry will add to
SMARTALK's ability to maximize it's HFS and Choice Hotel relationships. Also,
Conquest's platform will greatly expand our call processing network adding
capabilities to immediately deliver prepaid wireless products and services,"
said Robert H. Lorsch, Chairman and CEO of SMARTALK.
"This transaction adds significantly to the scale and scope of SMARTALK's
customer base, platform operations and management infrastructure," said Erich
Spangenberg, President and COO of SMARTALK. "ConQuest had total revenues of $39
million during fiscal year 1996. We anticipate being able to utilize ConQuest's
computer telephony capabilities to offer additional value-added
telecommunications services to our customers. Through its relationship with a
major utility company in the United Kingdom, they will also provide a platform
to further SMARTALK's international expansion. This is an ideal strategic move
for SMARTALK and it further solidifies SMARTALK's dominance in the prepaid
marketplace. The combined strengths of the two companies will further increase
SMARTALK's ability to leverage its position with its carriers, card and
packaging manufacturers, and other vendors to reduce costs and improve margins."
In connections with the transaction, SMARTALK will issue approximately 4.8
million shares of its common stock. It is anticipated that this transaction
will be accounted for under the purchase method of accounting. The parties
currently anticipate the transaction to be completed in the fourth quarter.
"We are excited about part of the SMARTALK team. The prepaid calling card
industry is consolidating and we believe that this transaction represents a
tremendous opportunity for our employees, shareholders and other corporate
partners," said James Sobwick, President and CEO of ConQuest. "We plan on being
a significant contributor to SMARTALK's prepaid business as well as to the
technology that will permit the Company to continue offering the
most advanced and complete set of enhanced services in the business. The
compatible network architectures and business strategy of SMARTALK and ConQuest
should result in a quick and efficient integration."
SMARTALK manufactures and distributes prepaid calling cards and other
enhanced telecommunications products that are sold at retail and also marketed
to advertising and promotional clientele. SMARTALK maintains retail distribution
agreements with mass merchandisers, consumer electronics retailers, supermarkets
and home office superstores, such as Office Depot, Future Shop, Venture Stores,
The Good Guys, Staples, Service Merchandise, Jewel/Osco Combo Stores, Osco Drug,
Sav-On Drug, OfficeMax, Dominick's Finer Foods, Eckerd Drug, Food4Less, Ralphs
Supermarkets, Spencer Gifts, Bradlees, Marshall Field's, Robinsons-May, and
Builders Square, as well as university book stores and convenience stores
nationwide. The Company also holds a variety of entertainment licenses for phone
cards including Star Wars. SMARTALK also offers specialized value-added phone
card and promotional programs, supporting a significant client base including
Gillette, Hewlett-Packard, Wells Fargo Bank, Nabisco, Pfizer and Prudential
Securities.
Based in Los Angeles, with additional offices in Boston, Orlando and San
Francisco, SMARTALK is a member of the Telecommunications Resellers Association,
International Telecard Association and the Consumer Electronics Manufacturer's
Association.
Note: Certain statements made herein that are not historical are
forward-looking within the meaning of the Private Securities Litigation Reform
Act of 1995. Such statements include, but are not limited to the completion of
the proposed transaction; the Company's utilization of ConQuest's existing
retail, call center services and call platform services relationships to expand
market share; and the Company's ability to successfully integrate ConQuest into
its current business. Investors are cautioned that all forward-looking
statements involve risks and uncertainties including, without limitation, risks
related to the Company's ability to successfully integrate ConQuest's operations
in a timely fashion, ability to maintain existing business and retailer
relationships including ConQuest's current business relationships, market
acceptance and consumer demand for the Company's products and services, pricing
dependence on third-party vendors and the Company's ability to maintain
efficient marketing and distribution expenditures with new product lines.
Investors are further cautioned that completion of the transaction is subject
to, among other conditions, approval of ConQuest shareholders, a SMARTALK
shareholder vote or a NASDAQ waiver with regard to the issuance of the stock and
receipt of applicable state and federal regulatory consents. This list is not
intended to be exhaustive. Investors who seek more information about the
Company's business and relevant risk factors may wish to review the Company's
SEC reports, including, but not limited to, its Annual Report on Form 10-K for
1996, and quarterly reports on Form 10-Q.
SOURCE SMARTALK Teleservices, Inc.
CONTACT: Investor Relations: William Kahn, Director, Corporate
Communications, 310-444-8800, ext. 133, or Media Inquires: Steve
Knipstein, Manager, Public Relations, 310-444-8800, ext. 147,
both of SMARTALK