AT&T Canada Acquires DMC Inc

AT&T Canada Inc, Canada's largest facilities-based competitive provider of local and long distance, voice, data and Internet communications services, announced that it has acquired DMC Inc, a Canadian leader in the deployment of business-focused Internet and e-business strategies and solutions for the digital economy.

DMC is a widely recognized, Canadian-based leader in the deployment of world class solutions for enterprises around business-to-business and business-toconsumer e-commerce, Internet/Intranet and Web applications, e-business interface to legacy systems, electronic payments, customer relationship management, wireless solutions, and workflow automation services. DMC has a unique depth of experience and potent capabilities that harness new technologies and deliver competitive advantage to their customers. Their solutions have been widely deployed across Canada's banking, insurance, brokerage, natural resources and service sectors. DMC's award winning Webification projects include a comprehensive array of services and expertise in the delivery of e-business applications and enterprise-scale Internet solutions.

The acquisition of DMC Inc, a privately held Toronto-based company, was funded by a combination of the issuance of 769.2 thousand AT&T Canada Class B Non Voting Shares from treasury and Cdn$50 million cash, with one-half of the cash consideration held in escrow for twelve months pending attainment of specified performance targets. Further terms of the transaction were not disclosed. DMC's management and entire team of Internet and e-business professionals, including founder and CEO Bruno Dammizio, will remain with the company and will operate as an independent, strategic component of AT&T Canada Internet and e-Business Services.

"Bruno and his management team have built a unique and powerful asset that delivers the most sought after capabilities in e-business today," said Ron Close, president of AT&T Canada Internet and E-Business Services. "The merging of this tremendous franchise with AT&T Canada Internet and E-Business Services allows us to provide an end-to-end suite of e-business solutions that will enhance the core business processes of our customers and strengthen their relationships with their customers and suppliers. DMC's powerful capabilities complement our best-in-class portfolio of Internet access, e-business security and enhanced hosting products, and provide a multitude of incremental opportunities to leverage our broadband network infrastructure and cross sell additional high value services into our premier base of business customers".

Bruno Dammizio, DMC's founder and CEO said, "We have had several appealing opportunities to align ourselves with other partners over the years, but none as compelling and synergistic as becoming part of the AT&T Canada family. Our strategies are extremely symmetrical, the synergies between our businesses are compelling, and we share the same vision of what it takes to thrive and win in this fast-paced market. Combining our proven capability of taking blue-chip businesses into the digital economy with AT&T Canada Internet and E-Business Services' robust suite of Internet access, hosting and security products -- and layering these capabilities onto AT&T Canada's expansive network infrastructure, broad customer base and strong direct distribution channels -- creates a powerful, end-to-end e-business services provider."

"The acquisition of DMC is an important addition to our capability of helping our customers transform their businesses into "e-businesses", said John McLennan, vice chairman and chief executive officer of AT&T Canada. "This is directly in line with our strategy of leveraging the most robust and extensive competitive telecom network in Canada and complementing it with a comprehensive suite of integrated industry-leading assets, capabilities and services that enhance the core business processes of our customers. DMC, with virtually all its rapidly growing sales derived from pure, high-end Webenablement projects, is clearly right in the market sweet spot with these emerging technologies."

DMC is widely recognized for its accomplishments in leveraging enabling technologies to consistently deliver best-of-class medium and large-scale custom e-business solutions of uncompromising quality, and is uniquely positioned to assist Canada's industry leaders in their transformation to the digital economy while maximizing their information technology investment. The acquisition of DMC is an exceptional fit with AT&T Canada's core strategy of providing an end-to-end suite of business-focused e-business, Internet and broadband communications solutions, and solidly positions the company as one of North America's leading communications and e-business service providers.

About DMC

DMC Inc is a Toronto-based e-business and Web enablement leader specializing in the delivery of electronic commerce applications, enterprise scale Internet and Intranet-based solutions, distributed multi-tier client/server systems, and data warehouse solutions for Canada's blue chip industry leaders. DMC, with more than 175 Internet and e-business professionals and a client roster that includes many of Canada's largest and most successful businesses, is a private Canadian corporation with its principal office in Toronto. Visit DMC's Web site, www.dmc.on.ca for more information about the company.

About AT&T Canada

AT&T Canada is Canada's largest facilities-based competitive provider of local and long distance voice, data and Internet telecommunications services. Created during 1999 from the merger of MetroNet Communications, AT&T Canada Long Distance Services, Netcom Canada and ACC TelEnterprises, AT&T Canada brings together the country's largest competitive local exchange carrier (CLEC), three of Canada's leading competitive Internet Service Providers (ISP), and Canada's pioneer in competitive long distance. Visit AT&T Canada's Web site, www.attcanada.com for more information about the company.