By KRYSTLE CHOW
Published in the Ottawa Business Journal.
May 28, 2007

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Satellite services company RAMTelecom Inc. has ended takeover negotiations with Texas-based SkyPort Global Communications Inc., with SkyPort walking away from the deal just a few weeks after appointing a new CEO.

Ottawa-based RAMTelecom last week announced that it has a reached a mutual agreement with SkyPort to “terminate the proposed acquisition of RAMTelecom to SkyPort and, alternatively, strengthen their alliance moving forward.”

“We recognize the common synergies between the two companies and strengthening the existing business-to-business relationship will help us expand our satellite-based business communications services,” said RAMTelecom chief executive Ralph Misener in a statement.

Mr. Misener added that the company has started to work on the final details of a technology procurement to expand and enhance its satellite network into the United States, which is expected to be launched in the third quarter of fiscal 2007.

In conference call, Mr. Misener emphasized that the termination of negotiations should not reflect negatively on RAMTelecom and that the company was “moving forward with its business plan.”

“It was more so a timing issue,” he said, adding that SkyPort had made a no-bid offer and had been invited to reconsider the acquisition in the future. “It was unfortunate that we could not reach a positive definitive agreement after five months of negotiations.”

The companies had said in February that RAMTelecom would be taken over by the Canadian arm of Houston-based SkyPort, following an announcement in January of a new alliance to improve communications service coverage in North America.

RAMTelecom then said in late April that it would be delaying the close of the takeover.

Both companies provide similar broadband satellite and terrestrial communications services through their respective network operations centres and teleports, especially to customers who require broadband in remote locations.

The deal would have seen Skyport paying cash to buy all issued and outstanding common shares of RAMTelecom at 60 cents per share, with the holders of outstanding share options and warrants being paid 10 cents and four cents respectively to cancel their options and warrants.

“Our relationship with RAMTelecom is strong, and we wish to continue to grow it through our partner program,” said SkyPort chief executive Patrick Brant, who took the helm of SkyPort on April 30 after the retirement of Roger Klotz.

As former chief executive of Loral Skynet, Mr. Brant was involved in negotiations for the $3.2-billion takeover of Telesat Canada by Loral Space & Communications.

SkyPort noted in an earlier release that the merging of Loral Skynet with Telesat and subsequent move to Ottawa had prompted Mr. Brant to leave the company in December.

“SkyPort now intends to position itself more firmly in the integration business through acquisitions and the leveraging of its ground-based teleport infrastructure,” the company said in its release. “The company believes this move, along with the addition of Mr. Brant, will expand SkyPort’s channel strategy and scope.”

When asked whether the appointment might have changed SkyPort’s direction and consequently influenced the takeover negotiations, Mr. Misener said it was “a possibility” but that he “hated to speculate.”

Meanwhile, Mr. Brant said in an interview that SkyPort’s change in leadership had meant that the company was “re-evaluating its strategy to take advantage of opportunities in the integrator sector (in the satellite industry).”

“We felt that it was not the appropriate time to go forward with this acquisition,” said Mr. Brant. “It was a mutually agreed-upon decision… it made sense to talk and take a new look at ways to work together (with RAMTelecom) with the new leadership of the company.”

RAMTelecom recently posted its first public fiscal year financial report, announcing revenues of $1.8 million and a net loss of $962,300 or seven cents per share in fiscal 2006.

Mr. Misener said that 2007 is RAMTelecom’s “breakout year,” having started the year with no debt and positive operating capital.

He said the company is focused on opening its new U.S. network and on increasing revenues in an underdeveloped market.

When asked if SkyPort might look again at acquiring RAMTelecom, Mr. Brant said “anything is possible,” but noted that it was unlikely to reconsider the deal in the short term.

However, he said the company would be able to “comment very loudly” on its strategy within 60 days or so, which could include information on how it intends to work with RAMTelecom.