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January 5, 1987

TELECOM PLUS INTERNATIONAL TO GO TO SIEMENS FOR $165m

By CBR Staff Writer

Hot on the heels of the agreement to sell its cellular telephone interests to McCaw Communications Cos (CI No 591), Telecom Plus International has agreed to sell most of the rest of its assets to Siemens AG’s Siemens Information Systems in Boca Raton, Florida for $165m. Telecom Plus, whose biggest business, Tel Plus Communications, specialises in marketing, installing and commissioning PABXs, had sales in 1985 of $240.9m. As well as Tel Plus Communications, in which it already has a 35% stake, Siemens will buy Telecom Plus Supply Corp, Telecom Plus Rental Systems Inc, and Telecom Plus Shared Tenant Services Inc, leaving the company with service operations, notably those in Puerto Rico, generating annual sales of less than $10m. Telecom Plus is selling out because the market has become much more competitive since the break-up of the Bell system – it reported a net loss of $684,000 for the first nine months of 1986 after extraordinary gains from asset sales of $11.5m; Siemens is buying because Telecom Plus already markets Siemens PABXs, and acquiring the company enables it to cut out the middle man. Rank Organisation Plc owns some 20% of the shares of Telecom Plus, but it is not clear whether it will come away with 20% of Siemens’ cash or with 20% of a company that holds $165m cash but hardly any business.

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