Gores Buying AT&T Pay-Phone Unit

The deal will create a prison-and-airport phone service titan.
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Gores Technology

bought

AT&T's

(T) - Get Report

pay-phone unit.

Terms weren't disclosed, but closely held Gores said the deal would create the biggest telecom service provider focused on prisons and airports.

"The combined entity will enjoy the benefits of having the best people, processes, technology and resources available in the field, and should immediately become the industry's leading service provider," Gores, a Los Angeles-based private technology equity firm, said.

"Together, the combined company will couple industry-leading technology with a powerful sales force and support team. We continue to focus our strategic vision in the telecom sector," said Steven Yager, president of mergers and acquisitions at Gores.

The AT&T unit, called National Public Markets, was formed in 1998 through the combination of TCG Payphone and AT&T's Payphone Development and Operations units. NPM was established to compete against the Regional Bell Operating Companies in the local pay-phone market. The business provides pay-phone services to prison inmates and manages an installed base of over 8,000 public telephones concentrated in major airports.

Gores has grabbed headlines in the technology sector in the past, notably with an unsuccessful bid for

Global Crossing

(GLBC)

in 2002.