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January 11, 2013

Elephant Talk to acquire 100 Percent of Telnicity's assets

Elephant Talk Communications, Corp., an international provider of software and services developed to manage network, billing and systems infrastructure for the telecommunication industry, recently announced that it intends to acquire 100 percent of the assets of Telnicity, LLC, a U.S. MVNE/MVNO enabler company headquartered in Oklahoma City, Oklahoma in an all-equity transaction. The transaction value is approximately $1 million, with Elephant Talk issuing 1 million shares of common stock at closing.

Elphant Talk sees the acquisition as a step to cement a base in the United States telecommunications market. The company will also take over Telnicity’s existing customer contracts, carrier agreements, and access to telSPACE and mCASH, Telnicity's propriety turnkey back office infrastructure and billing systems. Telnicity's 6 full-time equivalent employees will remain in their current positions. The transaction is expected to close on or before March 8, 2013.

"We will work on a seamless and efficient global platform for MNO's, MVNE's, and MVNO's to operate by taking advantage of the technologies of both companies," said Steven van der Velden, Chairman and Chief Executive Officer of Elephant Talk Communications. "Telnicity's relationships with several North American based telecommunications companies provide a head start for the launch of Elephant Talk's services into the U.S. mobile telecommunication market. In addition, Telnicity's existing customer base will be able to leverage Elephant Talk's technology and telecommunications relationships to offer more complete international calling and roaming packages."

"The all-equity transaction will result in less than 1 percent dilution to existing Elephant Talk stockholders while providing Elephant Talk a United States market presence. We believe an all stock transaction is an efficient and lower risk approach to entering this important market," stated Mr. Van der Velden. "As we work to bring the Elephant Talk operations to the U.S., we expect the financial impact to be limited for at least the first several quarters. Elephant Talk remains on track to achieve its first month of positive operational cash flow in early 2013."

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Edited by Rich Steeves

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