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[LOGO VERIZON] [LOGO NORTHPOINT]
FOR IMMEDIATE RELEASE: CONTACTS:
August 8, 2000 Caroline Howell, NorthPoint
415-365-6056
[email protected]
Joan Rasmussen, Verizon
212-395-2051
[email protected]
Verizon and NorthPoint to Merge DSL Businesses to Create
Leading National Broadband Company
'New' NorthPoint to Bring Benefits of Broadband
To Consumers, Businesses
New York, August 8, 2000 -- Verizon Communications (NYSE:VZ) and NorthPoint
(Nasdaq:NPNT) today announced a groundbreaking agreement to fundamentally change
the dynamics of the broadband industry. The companies will merge their digital
subscriber line (DSL) businesses to form a premier broadband communications
company dedicated to accelerating the delivery of high-speed data services
nationwide. The DSL businesses will be combined to create a "new" NorthPoint,
positioning the company to rapidly scale its broadband service offerings and to
deliver compelling benefits to consumers and businesses.
The merger will combine the companies' DSL networks, products, technology,
strategic partnerships and management, creating a strong broadband competitor
ideally positioned to unleash the Internet's full potential for delivering an
unlimited array of content and applications to high-speed customers.
"This deal combines complementary assets -- Verizon's position in the
consumer market and NorthPoint's presence with business customers -- to provide
the scale to fuel growth and deliver the full benefits of high-speed
connections," said Lawrence T. Babbio, Verizon vice chairman and president.
"The new company will expand broadband choice for customers, providing a
superior alternative to cable."
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"NorthPoint and Verizon are changing the broadband services game," said Liz
Fetter, NorthPoint president and CEO. "With this agreement, a new NorthPoint is
created, one with unique and unmatched assets that will enable us to rapidly
scale in an increasingly competitive broadband market. NorthPoint will be a
stronger competitor against cable and other broadband service providers,
delivering to customers the benefits that are always derived from competition:
innovation, increased choice and better service."
Fetter will continue to lead NorthPoint as CEO after the merger. The new
NorthPoint team will include management from both companies.
The new NorthPoint will include Verizon's existing DSL business, with its
broadband network assets, and an $800 million cash investment by Verizon. Of
the cash, $450 million 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 agreement has been approved by the
boards of both companies.
The new NorthPoint will use Verizon's $450 million cash investment to fund
its network expansion and ongoing enhancements to its industry-leading service
delivery, support systems and broadband product suite. The result will be
greater broadband choice for consumers and businesses nationwide, enabling them
to realize the full potential of the Internet.
Of the $450 million cash investment, Verizon will, subject to certain
conditions, provide financing of up to $350 million to NorthPoint prior to
closing. Upon completion of the merger, such financing would be converted into
common stock in the new NorthPoint.
NorthPoint will gain additional resources to assist in the continued
development of groundbreaking innovations designed to leverage its broadband
network and create new growth opportunities. These innovations include voice,
data and video offerings optimized for a DSL platform. Blast, for example, is
NorthPoint's platform for delivering video and other high-bandwidth content to
customers. Blast, which is currently in field trials in the San Francisco Bay
area, will significantly enhance the broadband experience for consumers and
businesses.
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The New Broadband Leader
The "new" NorthPoint will become the national provider of choice
for consumers, businesses and ISPs with the scale, scope and financial resources
to aggressively expand availability of broadband services and applications. The
combined operations of NorthPoint and Verizon expect to begin 2001 with the
following assets:
. a broadband network, comprised of more than 3,000 unique operational
central offices, passing approximately 63 million homes and businesses
in 163 U.S. MSAs (metropolitan statistical areas);
. more than 600,000 DSL lines; wholesale relationships with Verizon
Online, AOL, UUNET and Genuity, and strategic marketing relationships
with RadioShack, Microsoft, Staples, Blockbuster and other industry
leaders;
. approximately 3,000 employees dedicated to supporting the new
NorthPoint's competitive, customer-focused strategy; and
. broadband ventures in Europe through VersaPoint and in Canada through
NorthPoint Canada, addressing the rapidly emerging international DSL
opportunity.
In addition, the agreement calls for Verizon's ISP, Verizon Online, to
resell NorthPoint's DSL service nationwide.
Verizon's DSL businesses currently include more than 1,700 central
offices in 84 MSAs nationwide and NorthPoint's DSL businesses currently include
more than 1,500 central offices in 99 MSAs.
The new NorthPoint board of directors will have three members from
NorthPoint's existing board, three Verizon members and three independent
members, appointed by Verizon. Lawrence T. Babbio, Verizon vice chairman and
president, will serve as chairman of the board. Following the merger, the new
company will trade as a separately listed public company on the NASDAQ exchange
and will continue to report financial results. The new NorthPoint's financial
results also will be consolidated into Verizon's financial results for financial
reporting purposes.
NorthPoint's agreement with Verizon is subject to regulatory approvals
and the approval of NorthPoint shareholders. Shareholders representing
approximately 48 percent of the currently outstanding shares of NorthPoint have
agreed to vote their shares in support of the merger. The companies anticipate
completing the transaction by mid-2001.
Morgan Stanley Dean Witter acted as financial advisor to Verizon and
Goldman Sachs & Co. acted as financial advisor to NorthPoint.
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About NorthPoint
NorthPoint Communications Group, Inc., (Nasdaq: NPNT) one of the fastest-
growing DSL services providers in the U.S., is building a global network
designed to deliver affordable, dedicated high-speed Internet access, streaming
content and other value-added services to consumers and businesses around the
world. The company currently operates DSL-based local networks in 99 U.S.
metropolitan statistical areas (MSAs). NorthPoint is also expanding its
services around the globe through strategic partnerships with Versatel in Europe
and Call-Net in Canada. On August 8, 2000, NorthPoint announced an agreement
with Verizon to combine their industry-leading DSL businesses. The merger will
strengthen NorthPoint's ability to quickly scale to meet the fast-growing demand
for broadband services and to deliver innovative new services and greater choice
to American consumers and businesses. The combined operations of NorthPoint and
Verizon are expected to serve more than 600,000 DSL subscribers and will pass 63
million potential subscribers in 163 MSAs by the end of 2000. For additional
information, visit www.northpoint.net.
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About Verizon
Verizon Communications (NYSE:VZ), formed by the merger of Bell Atlantic and
GTE, is one of the world's leading providers of communications services.
Verizon companies are the largest providers of wireline and wireless
communications in the United States, with 95 million access lines and 25 million
wireless customers. A Fortune 10 company with more than 260,000 employees and
approximately $60 billion in 1999 revenues, Verizon's global presence extends to
40 countries in the Americas, Europe, Asia and the Pacific. For more information
on Verizon, visit www.verizon.com.
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EDITOR'S NOTE: Verizon and NorthPoint will hold a joint audio press conference
today to discuss their agreement at 11 a.m. EDT /8 a..m. PDT. Media can join
the call by dialing 888-843-1795, NorthPoint's President and CEO and Verizon's
President and Vice Chairman will host the call and be available for Q&A.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995: The statements contained in this release which are not historical facts
may be deemed to contain forward-looking statements. Such statements are
indicated by words or phrases such as "anticipate," "estimate," "projects,"
"believes," "intends," "expects" and similar words and phrases. Actual results
may differ materially from those expressed or implied in any forward-looking
statement as a result of certain risks and uncertainties, including, without
limitation, the company's dependence on strategic third parties to market and
resell its services, intense competition for the company's service offerings,
dependence on growth in demand for DSL-based services, ability to raise
additional capital and other risks and uncertainties detailed in the company's
Securities and Exchange Commission filings. Prospective investors are cautioned
not to place undue reliance on such forward-looking statements. The Company
disclaims any obligation to update any of the forward-looking statements
contained herein to reflect future events or developments.
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NorthPoint Communications Group, Inc. and Bell Atlantic Corportion (d/b/a
Verizon Communications) will file a joint proxy statement/prospectus and other
documents regarding the proposed business combination transaction referenced in
the foregoing information with the Securities and Exchange Commission. Investors
and security holders are urged to read the proxy statement/prospectus, when it
becomes available, because it will contain important information. A definitive
joint proxy statement/prospectus will be sent to stockholders of NorthPoint
Communications Group, Inc. seeking their approval of the proposed transaction.
Investors and security holders may obtain a free copy of the definitive joint
proxy statement/prospectus (when it is available) and other documents filed by
NorthPoint Communications Group, Inc. and Bell Atlantic Corportion (d/b/a
Verizon Communications) with the Commission at the Commission's web site at
www.sec.gov. The definitive joint proxy statement/prospectus and these other
documents may also be obtained for free by NorthPoint stockholders by directing
a request to: NorthPoint Communications Group, Inc., 303 Second Street, South
Tower, San Francisco, CA 94107, Attn: Investor Relations, (415) 403-4003,
email: [email protected].
