LOCKHEED MARTIN IMS DIVESTS TELEPHONE NUMBERING BUSINESS
TEANECK, NJ, December 22nd, 1998 -- Lockheed Martin IMS Corporation today announced that it has signed an agreement to sell its Communications Industry Services (CIS) business to CIS management and an affiliate of E. M. Warburg, Pincus & Co., LLC. CIS is a leading provider of high quality, neutral, third-party numbering services to the telecommunications industry. Terms of the sale were not disclosed. CIS serves as the North American Numbering Plan Administration (NANPA) and as the local number portability administrator (LNPA) for the U.S. and Canada.
Warburg, Pincus is a major global private equity investment firm that manages approximately $6 billion in investments.
Under the divestiture, all CIS employees will become part of the new independent corporation.
"The sale of CIS will be transparent and seamless to CISÂ¿ customers and the telecommunications industry since the management and operations under Warburg, Pincus will remain unchanged," said Jeff Ganek, CIS senior vice president and managing director. Ganek said, "CIS has worked closely with the industry, the FCC and the North American Numbering Council to ensure the smooth transition of the NANPA duties and obligations from the industry to the NANPA. The proposed sale will provide the CIS business with the resources necessary to continue to perform its duties in an exemplary fashion."
The decision to divest the CIS business came after Lockheed Martin announced several months ago the formation of a Global Telecommunications subsidiary, its intention to enter the telecommunications services market and its agreement to purchase COMSAT Corporation. The divestiture now by Lockheed Martin ensures continued neutrality and integrity of the vital services and functions CIS provides to the telecommunications industry and to the public in general.
"Throughout this process, Lockheed Martin has assured the Federal Communications Commission (FCC) and the telecommunications industry that it would take all necessary steps to ensure the continued neutrality and high performance standard of the CIS business," said John Brophy, Lockheed Martin IMS president and CEO.
"Warburg, Pincus is committed to supporting and ensuring the high quality operations of CIS as the NANPA and LNP provider," said Bill Janeway of Warburg, Pincus.
A request was filed December 21 with the FCC as well as the regional local number portability LLCs and the Canadian LNP Consortium, which oversees LNPA, seeking a determination that the sale does not jeopardize the neutrality of CIS.
The FCC awarded Lockheed Martin IMSÂ¿ CIS the five-year NANPA contract in October 1997. In January 1998, CIS assumed responsibility for administering North AmericaÂ¿s area codes and other number resources. As the NANPA, CIS oversees the assignment of area codes, three-digit central office codes, carrier identification codes and other telephone numbering resources throughout the United States, Canada and much of the Caribbean.
CIS also serves as the sole provider of LNP administration services in the U.S. and Canada, under which CIS provides the Number Portability Administration Center Service Management System service. LNP is a key component of the emerging competitive local exchange carrier marketplace established by the Telecommunications Act of 1996, which enables business and residential customers to keep the same phone number if they switch local service providers.
Also, CIS has been administering the first-of-its-kind "number pooling" trial in the 847 area code in Illinois, a new application of LNP to conserve the use of telephone numbers to reduce area code consumption. Number pooling allows for the assignment of phone numbers in 1,000 number blocks instead of the network-mandated 10,000 number blocks, thus extending the life of area codes and resulting in more efficient use of telephone numbers.
Since assuming the neutral, third-party responsibilities in the telecommunications industry, CIS has consistently received awards and high marks from its customers and constituents. In June, for example, the telecommunications industry recognized CISÂ¿ high level of performance in the implementation of LNP by awarding it the SuperQuest Award for the yearÂ¿s Outstanding Accomplishment in Operating Support Systems. In addition, CIS has received consistently high ratings from the telecommunications industry for its job performance in NANPA and LNP.
The sale is subject to regulatory approval and the approval of CISÂ¿ customers. Lockheed Martin and Warburg, Pincus will cooperate with and support CISÂ¿ customers in their review and consideration of the proposed transaction.
Note: This press release may contain forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Such forward looking statements involve risks and uncertainties that could cause actual results to differ materially from anticipated results including the effects of government budgets and requirements, economic conditions, competitive environment, timing of awards and contracts; the outcome of contingencies including litigation, changes in applicable laws, and program performance in addition to other factors not listed. See in this regard Lockheed Martin CorporationÂ¿s filings with the Securities and Exchange Commission. Lockheed Martin Corporation does not undertake any obligation to publicly release of any revisions to forward looking statements to reflect events or circumstances or changes in expectations after the date of this press release or the occurrence of anticipated events.