Verizon and NorthPoint to Merge DSL Businesses
Verizon Communications (http://www.verizon.com) and NorthPoint (
http://www.northpoint.net) today announced an agreement to merge their DSL businesses to form a new "NorthPoint". The merger will combine the companies' DSL networks, products, technology, strategic partnerships and management with the goal of creating a more competitive broadband company.
The new NorthPoint will invest $450 million to fund its network expansion and ongoing enhancements to its service delivery, support systems and broadband product suite. The desired result is greater broadband choice for consumers and businesses nationwide, enabling them to realize the potential of the Internet.
NorthPoint will include Verizon's existing DSL business, with itsbroadband network assets, and an $800 million cash investment by Verizon. $450 million of Verizon's investment will be used to fund the new NorthPoint's capital expenditures and operations, and NorthPoint shareholders will receive $350 million in cash or approximately $2.50 per share. The actual per share amount will be based on the number of outstanding NorthPoint shares and warrants as of the closing date of the transaction. NorthPoint shareholders also will receive one share in the new NorthPoint for each share held as of the closing date.
Verizon will own 55 percent of the new NorthPoint and existing NorthPoint shareholders will own 45 percent. The merger agreementhas been approved by the boards of both companies.
Liz Fetter will continue to lead NorthPoint as CEO after the merger. The new NorthPoint team will include management from both companies.