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Filed by NorthPoint Communications Group, Inc.
Pursuant to Rule 425 under the Securities Act of 1933 and
Deemed Filed Pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: NorthPoint Communications Group, Inc.
Commission File No. 000-29828
Contacts:
Media Investors
Jim Monroe, NorthPoint Cathy Dodd, NorthPoint
703-847-3681 415-365-6096
[email protected] [email protected]
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Joan Rasmussen, Verizon John Dierksen, Verizon
212-395-2051 212-395-1842
[email protected] [email protected]
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NorthPoint Receives $150 Million Investment from Verizon
Permanent Financing Part of Agreement to Merge Companies' DSL Businesses
San Francisco, September 6, 2000 - NorthPoint Communications [Nasdaq: NPNT]
announced today that it received a $150 million cash investment from Verizon
Communications [NYSE:VZ], the first step in completing their groundbreaking
agreement to merge their DSL (digital subscriber line) businesses.
In exchange for its cash investment, Verizon will receive $150 million of
convertible preferred NorthPoint stock. This pre-merger investment - along with
an additional $200 million in debt financing committed by Verizon and to be made
available to NorthPoint after January 1, 2001 - are expected to fulfill
NorthPoint's funding requirements beyond the targeted close of the merger in
mid-2001.
This $350 million in pre-merger financing is part of Verizon's total $800
million cash investment in the new NorthPoint. After closing, Verizon will own
55 percent of the new NorthPoint and existing NorthPoint shareholders will own
45 percent.
"Verizon's equity investment and debt financing will help NorthPoint maintain
strong momentum as we move toward the close of our merger agreement," said Liz
Fetter, NorthPoint president and CEO. "We will use our greater financial
strength to expand our network, scale our business and enhance the broadband
customer experience. We look forward to the completion of the merger and to
delivering its many benefits to American consumers and businesses."
"The new NorthPoint will provide a much-needed alternative to cable in
delivering data and entertainment over the Internet," said Lawrence T. Babbio,
Verizon vice chairman and president. "Our investment today will enable
NorthPoint to fund its network expansion and continue to enhance its service
delivery, support systems and product suite so that the new NorthPoint will hit
the ground running as a broadband industry leader."
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On August 8, Verizon and NorthPoint announced they will fundamentally change the
dynamics of the broadband industry by merging their DSL businesses, creating a
premier national broadband communications company. On a pro forma basis, the
combined DSL operations of NorthPoint and Verizon by the end of the year are
expected to include:
. A broadband network 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;
. Strategic marketing and wholesale relationships with Verizon Online, AOL,
UUNET, Genuity, 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.
The preferred stock Verizon will receive for the $150 million investment
announced today and the $200 million in debt financing will be converted into
common stock in the new NorthPoint upon completion of the merger.
Of the total $800 million cash investment, $450 million will fund the new
NorthPoint's capital expenditures and operations, and the remainder will go to
NorthPoint shareholders who will receive approximately $2.50 per share at
closing.
The merger is subject to regulatory approvals and the approval of NorthPoint
shareholders. The companies expect the deal to close by mid-2001.
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 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. On a pro forma basis, the combined operations of NorthPoint and
Verizon are expected to serve more than 600,000 DSL subscribers and to 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 more than 100 million access line equivalents and 26.5
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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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. Some of these risks
and uncertainties include, without limitation: NorthPoint's dependence on
strategic third parties to market and resell its services, intense competition
for NorthPoint's service offerings, dependence on growth in demand for DSL-based
services, ability to raise additional capital, the inability to obtain, or meet
conditions imposed for, governmental approvals for the proposed merger with
Verizon Communications' DSL business, the failure of NorthPoint's stockholders
to approve the merger, costs related to the merger, the risk that NorthPoint's
and Verizon's DSL businesses will not be integrated successfully, the failure of
NorthPoint to realize anticipated benefits of the merger and other economic,
business, competitive and/or regulatory 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.
NorthPoint Communications Group, Inc. and 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 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].
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