Stocks for Paivis Corp. (OTCBB: PAVC) suddenly shot up 161 percent this afternoon, spurred on by the company’s news that it may be acquiring Detroit Phone Cards Inc., a private eastern-based United States corporation.
According to Paivis’ most recent statement, Paivis has entered into a Letter of Intent with Detroit Phone Cards to acquire 100 percent of the private company’s outstanding stock in exchange for stock and cash. The statement explains that Detroit Phone Card generates approximately $24 million in sales revenue from prepaid long distance cards every year. This, coupled with the $6 million that Detroit Phone Cards pulls in from prepaid cellular phone sales, would add $30 million in annual revenue to Paivis Corp’s coffers. The company went on to say that “upon a successful closing, this acquisition will add earnings to the company’s income statement,” and that “Paivis management anticipates this acquisition will improve its infrastructure.”
Gregory Bauer, the CEO and president of Paivis, went into a bit more detail regarding the deal.
“We are excited about all of our acquisition prospects, but this particular acquisition puts us into the prepaid cellular service business, which gives a high margin business line to expand upon and increase our potential for quality earnings,” Bauer said in the statement. “The combination with this business also expands our revenue base in the prepaid [phone] card business and brings additional infrastructure that will develop certain positive economics of scale.
“We look forward to completing this transaction and providing more growth and value to our shareholders,” Bauer added.
Rami Chahine, CEO and president of Detroit Phone Cards, was a little more terse when commenting on the acquisition.
“We are excited about joining the Paivis team and look forward to getting the Definitive Agreement signed.”
In response to the news, share prices jumped from today’s opening price of 12 cents to today’s closing price of 34 cents.
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