Mergers, Acquisitions and Financial Results

Gateway Communications, a leading provider of pan-African voice and data connectivity services, has agreed to acquire GS Telecom, provider of data connectivity services to corporate customers and telecommunications operators in Africa. The transaction was valued at approximately $37.5 million and is to be financed through a combination of cash and funds from a newly issued bond.  The transaction is expected to complete mid-May subject to certain conditions.

GS Telecom provides services in 27 African countries, with a major presence in Nigeria, the fastest growing communications market in Africa over the last five years.

The transaction would strengthen Gateway’s position as the largest provider of voice and data connectivity services in sub-Saharan Africa, boosting Gateway’s customer base with an additional 200 customers to over 1,200 customers in over 37 countries in Africa (Gateway’s current network includes 30 African countries). The acquisition would bolster Gateway’s presence in the rapidly growing business communications market and provide access to local infrastructure and support capability.

The transaction will also increase Gateway’s geographic footprint and provide greater access to the rapidly growing Nigerian market. The enlarged business will benefit from network economies of scale with access to the largest private satellite footprint on the continent consisting of 25 transponders of capacity and to the SAT-3 undersea cable.

The combined proforma revenues for the year ended 31 December 2006 for Gateway and GS Telecom were $180.0 million and EBITDA was $28.3 million.