Prestige to become a major US player following its acquisition of Radian and WesTower
June 19, 2008 - Montreal, Canada-based Prestige Telecom Inc. will become the largest independent wireless infrastructure player in Canada with a significant presence in the U.S. following its WesTower Radianannounced acquisition of WesTower LLC of Houston, TX, and Radian Communication Services (Canada) Ltd. of Oakville, Ontario, for about $100 million in cash and shares.

Combining the three will result in "a stronger and more strategic business than any of us could have achieved independently," said Pierre Yves Methot, Prestige's chairman and chief executive officer.

"We believe that, with these two deals, our growth will be significant. We're well positioned to take advantage of the growing trend of telecom companies outsourcing EF&I services and the new construction arising from the wireless spectrum auction," he said.

Jack Pulkinen, CEO and president of Radian Communications Services, said that the agreement does not include the Rohn Products Division, headquartered in Peoria, IL.

"I am very pleased with this deal for Radian, as it caps our significant achievement of turning around Radian from a position of negative cash flow during the era of the telecommunication crash, to its current position of multiple years of positive EBITDA," Pulkinen said.

The transactions, expected to close next month, will more than triple the labor force and quintuple the revenue of Prestige, which provides engineering, materials, installation and support services for the wireless, wireline and cable-television industries.

Payne to serve as vice-chairman, Jarvis to head up U.S. Operations
Prestige announced management changes where Calvin Payne, the CEO of WesTower, will join the board of Prestige and will be appointed vice-chairman.

Commenting on the transaction, Payne said, "We are at a juncture when communications industry players are increasingly choosing to work with outsource service partners in order to focus on their core competencies of driving customer growth through development of new and innovative customer service offerings. The Prestige, WesTower and Radian combination makes a great deal of sense because of the complementarities of technical talent, management strengths, infrastructure service offerings and customers."

Other management changes are:
Michael Jarvis, the president of U.S. operations of WesTower, will become the president of US operations for Prestige and will also join the board of Prestige.

Brian McFadden will continue as the president and chief operating officer of Prestige, but will resign from the board of Prestige.

Peter Jeffrey, the president of Canadian operations of WesTower will become the president of Canadian wireless operations of Prestige.

Mark Goldman will become the president of Canadian wireline operations of Prestige.

Mike Hale, the current vice-president, operations of Radian, will become the president, wireless technical services of Prestige.

Mike Carr, the chief financial officer of WesTower, will become the chief financial officer of prestige.

Radian, 89 per cent owned by Onex Corp.,has 310 full-time employees in eight branch offices in Canada and the U.S. and revenue of $58 million in 2007.

WesTower has 28 regional offices in the U.S. and Canada, about 725 full-time employees and $164 million in revenue in 2007.

Both companies will be taking equity stakes in Prestige. Wes-Tower's owners are getting $20 million in shares and $5 million in promissory notes along with $55 million in cash. The Radian purchase involves $7.5 million in cash and $12.5 million in shares, with Onex becoming Prestige's largest single shareholder with a stake of 13 per cent.

The acquisitions will be financed in part by a $30-million public offering of Prestige shares.

Prestige employs 350 people from bases in Montreal, Toronto and Edmonton, and operates in the U.S. under a subcontractor arrangement with Comforce Telecom Inc.

Benefiting from the Prestige expansion are investors: Robert Milton, chairman and chief executive officer of ACE Aviation Holdings Inc., parent of Air Canada; and Robert Brown, the head of flight-simulator maker CAE Inc.

The two executives are among the key investors in Montreal-based merchant banking firm CPVC Financial Corp.

In 2006, CPVC provided a badly needed $1-million loan to Prestige. The company then began to enjoy increased sales and better margins and in 2007 had sales of $37 million.

The combined companies will allow Prestige to becomes Canada's biggest player in EF&I, with an estimated 60-per-cent market share, according to a company report.

Under the terms of the Radian purchase agreement, Prestige will pay approximately $20 million plus assumed debt of approximately $0.6 million, subject to adjustments, at closing to purchase all the issued and outstanding common shares and class A preferred shares of Radian, which will be payable as to $7.5 million in cash and approximately $12.5 million in Prestige Shares.

The WesTower purchase agreement has Prestige paying approximately $80 million, subject to adjustments, at closing to purchase all the membership interests in WesTower, which will be payable as to $55 million in cash, $20.0 million in Prestige Shares and $5.0 million in promissory notes of Prestige.

Management of Prestige has identified cost-saving opportunities resulting from the acquisitions that will reduce operating costs through streamlining of functions, facilities consolidation, and systems-related savings. An integration plan and team will be put in place with the objective to achieve at least $2 million of cost synergies within a period of 6 to 12 months.

In April of 2006, Berliner Communications acquired the U.S. wireless infrastructure construction and installation business of Radian.

Prestige's purchase agreement amounts are in Canadian dollars. Today's exchange rate is almost identical at 1.0127. 

 
   
     
Anritsu