World Access Inc, the Georgia-based communications equipment manufacturer, is set to purchase a 55% stake in NACT Telecommunications Inc, the telephony switching systems and telecoms software developer, for $71.8m. The controlling stake is being sold by Canadian telecoms company GST Telecommunications Inc, which floated its NACT subsidiary on the Nasdaq exchange in February 1997, since when the stock price has risen by 73%. GST will also be given the option to sell its remaining 12% stake to World Access for $17.7m. On completion, scheduled for a month’s time, World Access intends to merge the companies by offering its own stock to all remaining shareholders. GST is selling out to focus on its core carrier activities and its commitment to becoming a competitive local exchange carrier, the company said. But GST’s earnings have been heavily negative for the past four years and in the twelve months to September, the company consumed over $300m of cash in operating and investing activities. GST was forced to raise $350m in long term debt in the year, and at year end, only $55m in liquid assets remains on the balance sheet. NACT was founded in 1982, and in the last fiscal year to September, it grew revenues by 70% to $28m while earnings jumped to $3.8m from just $200,000.
