GOAMERICA® ACQUIRES VERIZON TRS DIVISION AND MERGES WITH HANDS ON
SERVICES TO BECOME A LEADING PROVIDER OF INTEGRATED COMMUNICATIONS
SERVICES
Clearlake Capital Investment and Sponsorship Enables Company
Transformation
HACKENSACK, N.J., January 10, 2008 GoAmerica, Inc. (NASDAQ: GOAM),
a provider of communications services for people who are deaf,
hard-of-hearing, or speech-disabled, today announced that it has
closed the transactions with Clearlake Capital Group ( Clearlake
Capital ), Verizon, and Hands On as described to its shareholders at
its annual meeting on December 13, 2007.
Transaction and Financial Summary
The Company raised $125 million of equity and debt financing; $15
million of which is in the form of an unfunded credit facility.
The Company closed an asset purchase of the Verizon
Telecommunications Relay Services ( TRS ) division, a leading
provider of relay services.
The Company completed a merger with Hands On Video Relay Services
(“Hands On”), a California-based provider of video relay and
interpreting services.
On a trailing, twelve-month pro-forma basis ending December 31, 2007,
the combination of GoAmerica, the Verizon TRS division, and Hands On
would have generated approximately $110 million in revenue.
Compared with operating GoAmerica, Hands On, and the TRS division
separately, GoAmerica expects to realize material cost savings and
synergies over time from the combination of GoAmerica, Verizon TRS,
and Hands On.
GoAmerica emerges from this series of transactions as a robust
company with operating scale, cash flow, a deep pipeline of
innovative products, leading strategic and financial partners, and a
strong balance sheet to enable further growth opportunities, said
Dan Luis, CEO of GoAmerica. With the transactions now closed, we are
positioned to hit the ground running, with an emphasis on profitable
growth and delivering new product innovations to our customers.
We are very pleased to sponsor the three-way combination of
GoAmerica, Verizons TRS division, and Hands On Services, said
Behdad Eghbali, a partner at Clearlake Capital. The resulting
company is uniquely positioned and capitalized for growth and
innovation, further establishing itself as a market leader in
integrated communication services.
As a founder of Hands On, and now a shareholder of GoAmerica, I am
excited about the financial strength of the combined company, said
Ronald Obray, founder and CEO of Hands On. In addition, while the
financial aspects are attractive, weve always taken seriously our
commitment to quality, innovation, and employment opportunities, as
well as breaking down communications barriers for the deaf and hard
of hearing this is especially true because at Hands On, many of our
customers are also our friends. Now that the merger is closed, I look
forward to seeing this mission carried out in all of the Company’s
strategic initiatives.
Integrated Products and Services Offered
The combined Company has five lines of business:
Internet Text Relay Services Internet text relay services enable
deaf or hard of hearing callers to use a Web-connected computer or
wireless handheld device to place calls, which are connected to a
relay operator. The relay operator calls the voice number and then
verbally speaks the text message typed by the deaf caller to the
hearing recipient, and types the hearing partys responses back to
the deaf party. The Company provides versions of this service under
the IP-Relay business acquired from Verizon and the existing i711
business from GoAmerica.
Video Relay Services ( VRS ) Using VRS, a deaf caller begins a call
by communicating directly with a sign language interpreter over a live
video connection, either on a webcam-equipped PC or a set-top
videophone; the interpreter places the call on the deaf person’s
behalf, and translates the caller’s sign language into audible speech
for the hearing person, and back into sign language for the deaf
caller. The Company provides versions of this service primarily under
the Hands On Video Relay Services ( HOVRS ) and i711 brands. In
addition, the Company offers a white label solution by providing the
infrastructure and interpreting services for video relay services
offered by Sprint and AT&T.
Community Interpreting Services Certified sign language
interpreters provide interpreting services in situations where relay
services may not be available or ideal, such as a doctor appointment
or in-person business meeting.
· Wireless Devices and Services The Company provides wireless
devices, such as the T-Mobile Sidekick, or other devices that are
hearing-aid compatible, and value-added wireless services customized
for deaf or hard of hearing consumers.
· State Telecommunications Relay Services Traditional relay service
enables a person with a hearing or speech disability to use a
text-telephone device (historically referred to as a telephone
typewriter, or a TTY device), to initiate calls to, and receive calls
from, hearing persons. The Company has contracts to provide these
services in California, Tennessee, and the District of Columbia.
We have further bolstered the strengths of our team and increased
the tools at our disposal which will allow us to continue to develop
leading communication products and services for our customers, said
Ed Routhier, President of Hands On. While product innovation is a
top priority, we remain committed first to creating a highly
attractive environment for our employees, making us not only the
provider-of-choice, but also the employer-of-choice.
Capital Structure and Strong Post-Closing Balance Sheet
In conjunction with the transactions, the Company has issued an
aggregate of 7,736,944 shares of preferred stock (including 290,135
shares issued on August 1, 2007) to an investor group led by
Clearlake Capital and 6,700,000 shares of common stock to the
stockholders of Hands On.
The Company has also successfully completed debt financing of $40
million in first lien debt and $30 million in second lien debt. To
create additional flexibility to pursue strategic opportunities, the
Company has also secured a $15 million unfunded credit revolver which
creates additional liquidity for the Company as needed. Clearlake
Capital Group, LLC provided the second lien debt and assisted the
Company in arranging the first lien debt and revolver.
Board Composition
GoAmericas Board of Directors now consists of eight members:
including, Aaron Dobrinsky (Chairman), Dan Luis (CEO), Edmond
Routhier (President of Hands On), Behdad Eghbali and Steven Chang of
Clearlake Capital Group, LLC, Bill McDonagh, Steve Eskenazi, and King
Lee. Together, the Board will identify and select an additional
independent director at which time King Lee will resign.
Advisors
RBC Daniels provided advisory services to GoAmerica related to the
Verizon TRS transaction. JMP Securities acted as exclusive financial
advisors to Hands On in this transaction.
About Telecommunications Relay Services
Telecommunications Relay Services ( TRS ), created by Title IV of the
Americans with Disabilities Act of 1990 ( ADA ), enable an individual
with a hearing or speech disability to communicate by telephone or
other device through the telephone system with a person without such
a disability through a communications assistant ( CA ) or video
interpreter (“VI”) at a relay center.
TRS providers, such as GoAmerica, receive reimbursement either
directly from state contracts, or from a pool of funds, collected
from telephone carriers by the Federal Communications Commission
( FCC ) and administered by the National Exchange Carriers
Association ( NECA ), based on the number of conversation minutes
handled by each provider.
About GoAmerica
As a result of its acquisitions, GoAmerica is the nation’s largest
and second largest provider of text relay and video relay services,
respectively, and provides a wide range of communications services
tailored to the needs of people who are deaf, hard-of-hearing, or
speech-disabled. The Company’s vision is to improve the quality of
life of its customers by being their premier provider of high
quality, innovative communication services that break down
communications barriers. For more information on the Company or its
services, visit http://www.goamerica.com or contact GoAmerica
directly at TTY 201-527-1520, voice 201-996-1717, Internet Relay by
visiting http://www.i711.com, or video phone by connecting to
hovrs.tv.
About Clearlake Capital Group
Clearlake Capital Group is a private investment firm integrating
private equity, leveraged finance, and special situations in both
private and public market opportunities. Clearlake Capital seeks to
partner with world-class management teams to invest in businesses
going through change or expansion with patient long-term capital. The
firm has a flexible mandate to invest across the capital structure in
corporate divestitures, recapitalizations, restructurings, going
private buyouts and minority equity investments. Clearlake Capital’s
founding principals, Steven Chang, Behdad Eghbali, and Jose
Feliciano, have led over 30 investments totaling more than $3 billion
of capital in sectors including business services, communications and
media, energy and power, healthcare, manufacturing, retail/consumer
and technology.
Safe Harbor
The statements contained in this news release that are not based on
historical fact — including statements regarding the anticipated
results of the transactions described in this press release —
constitute “forward-looking statements” that are made in reliance
upon the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements may be identified by
the use of forward-looking terminology such as “may”, “will”,
“expect”, “estimate”, “anticipate”, “continue”, or similar terms,
variations of such terms or the negative of those terms. Such
forward-looking statements involve risks and uncertainties,
including, but not limited to: (i) our limited operating history;
(ii) our ability to respond to the rapid technological change of the
wireless data industry and offer new services; (iii) our dependence
on wireless carrier networks; (iv) our ability to respond to
increased competition in the wireless data industry; (v) our ability
to integrate the businesses and technologies we have acquired; (vi)
our ability to generate revenue growth; (vii) our ability to increase
or maintain gross margins, profitability, liquidity and capital
resources; and (viii) difficulties inherent in predicting the outcome
of regulatory processes. Such risks and others are more fully
described in the Risk Factors set forth in our filings with the
Securities and Exchange Commission. Our actual results could differ
materially from the results expressed in, or implied by, such
forward-looking statements. GoAmerica is not obligated to update and
does not undertake to update any of its forward looking statements
made in this press release. Each reference in this news release to
GoAmerica , the Company or We , or any variation thereof, is a
reference to GoAmerica, Inc. and its subsidiaries. GoAmerica , the
“GoAmerica” logo, “i711”, and the “i711.com” logo, and “Relay and
Beyond” are registered trademarks of GoAmerica. i711.com and “i711
Wireless” are trademarks and service marks of GoAmerica. Other names
may be trademarks of their respective owners.
###
Joe Karp
Vice President, Marketing
GoAmerica Communications, Inc.
201-527-1518
Link: http://www.goamerica.com/news/pr.php?action=view&article=282
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