Miami, Fla. -- Epixtar Corp. has entered a Definitive Letter of Intent (LOI) to acquire 100 percent of the shares of Innovative Marketing Strategies, Inc. (IMS) of Leawood, Kansas and 100 percent of the shares of IMS Philippine subsidiary, Innovative Marketing Strategies International, Inc. (IMS Asia). IMS has call centers in Wheeling, West Virginia; Duluth, Minnesota; and Pittsburg, Kansas. IMS Asia is located in the Makati area of Metropolitan Manila. Epixtar will pay $14.4 million for the privately held IMS in a combination of cash and stock and has already advanced IMS some cash to discharge certain IMS liabilities prior to closing, anticipated to occur in August 2004. IMS has reported 2003 revenues of approximately $20 Million while Epixtar's revenues for the same period were about $36 Million.
Epixtar specializes in the trend to locate business process outsourcing and call center operations to the Philippines, where a highly educated, English-speaking workforce is available at a fraction of the cost of their U.S. competitors. The historical affinity between the United States and the Philippines assures a familiarity with U.S. culture that equates to higher levels of customer satisfaction when compared to other offshore locations such as India or the Caribbean. Additionally, as a former U.S. colony and staunch ally of the United States, the Philippines is rarely the subject of public backlash against offshore outsourcing.
IMS has been in the U.S. telemarketing industry since its founding in 1996.
"It's all about execution in the outsourcing business," says Brad Yeater, President of IMS and newly appointed Executive Vice President for Operations at Epixtar. "We intend to bring our time-tested methodology to Epixtar's formidable operations in the Philippines; we know what makes telemarketing campaigns succeed for our clients."
Epixtar has been building call center operations in the Philippines since last year. To date the company has successfully completed the acquisition of I-Call Global Services, Corp. assets and expanded that company's former location in Alabang (a Manila suburb) to approximately 250 seats. The company is developing its 1,600 seat regional headquarters in Eastwood City CyberPark (Libis, metro-Manila); 350 seats are fully operational in Eastwood with another 700 coming on line in August. Final completion of Epixtar House is scheduled for November 2004. The company is also developing a call center in Dumaguete, a central Philippine city to the south of Manila. The company plans to continue its expansion in the Philippines and hopes to be operating at least 5,000 seats by the end of 2005.
"This acquisition conforms to Epixtar's intent to grow rapidly in line with our clients' requirements for quality, cost-effective solutions, and reliable on-shore and offshore capacity,” says David Srour, Chief Executive Officer of Epixtar Corp. “This gives the IMS client base an option to lower costs without sacrificing performance. Integrating IMS' professional management team, thorough understanding of telesales requirements and track record of delivery bode well for Epixtar's future growth."
“Our decision to join Epixtar not only indicates our confidence in their vision for the future of the industry, but affirms our certainty that the Philippines is a desirable complement to our domestic operations," says Steve Rasmussen, Chief Executive Officer of IMS. "The combination of Epixtar's experience in the Philippines and our history of exceeding clients' performance expectations, create an entity that is greater than the sum of it parts".
Completion of the transaction is subject to, among other things, further due diligence, the receipt of certified financial statements and the approval of the Epixtar Board of Directors.