AT&T To Buy NorthPoint Assets For $135 million

AT&T Corp. said Thursday a U.S. bankruptcy court has approved a deal for it to acquire the assets of Internet service provider NorthPoint Communications for about $135 million.

The deal effectively marks the end of NorthPoint, which had been a darling of Wall Street for its promise of delivering high-speed Net access via DSL to millions of subscribers. But the Internet markets failed to develop fast enough.

Wireless phone service provider Verizon Communications backed out of a deal to buy a 55 percent stake in the company last November, which led to NorthPoint's bankruptcy filing in January and Thursday's AT&T deal to snap up its assets.

The acquisition, subject to regulatory approval and other conditions, includes San Francisco-based NorthPoint's co-locations nationwide, certain network equipment, systems and support software and related assets.

NorthPoint provides digital subscriber line (DSL) service for high-speed Internet access over existing phone lines. AT&T and NorthPoint said the deal should close within 60 days.

NorthPoint said the sale will include workforce reductions and the imminent termination of the company's customers' network services.

NorthPoint employed about 1,065 people when it filed for Chapter 11 bankruptcy in January, but that number has dropped to about 950 since then. AT&T said it expects to hire a percentage of those employees but could not be more specific.

'We are delighted to be acquiring NorthPoint's DSL assets,' said Robert Aquilina, co-president of AT&T Consumer. 'They will help us in our efforts to move aggressively to bring the full benefits of DSL to consumers and businesses.'

NorthPoint was a former financial high-flyer, with its stock trading as high as $42 per share less than two years ago. Just ahead of its bankruptcy filing, the stock had traded down below $1.50 a share before being delisted from the Nasdaq in February.

Following the sale of its assets to AT&T, NorthPoint will wind down its business and expects to be completely liquidated within the next 30-60 days, a company spokesman said.

Shares of AT&T closed down 49 cents to $21.83 on the New York Stock Exchange. The stock has ranged from $16.50 to $60.75 in the past year.

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