Virtualization market leader VMware (VMW) will acquire a 5 percent equity stake in managed hosting provider Terremark Worldwide(TMRK) for $20 million, the two companies said today. Under the agreement, VMware will purchase 4 million shares of newly issued Terremark common stock at $5 per share. The investment is likely to raise Terremark’s profile as a provider of virtualization and cloud computing services. Shares of Terremark closed today’s session at $4.80 a share, up 44 cents for a gain of 7.3 percent.
“VMware has worked closely with Terremark for years, and during that time it has distinguished itself as a leader in delivering VMware virtualization, security, and business continuity to customers of all sizes and in all industries,” said Dan Chu, Vice President of Emerging Products and Markets. “This investment in Terremark underscores the importance of this partnership and our belief in their ability to leverage our technologies as part of the VMware vCloud initiative to develop reliable and scalable cloud computing solutions.”
“VMware is the recognized leader in virtualization and a driving force behind the evolution of cloud computing,” said Manuel D. Medina, Terremark’s Chairman and CEO. “VMware’s powerful technology is a key component of our suite of virtualized offerings, including our Enterprise Cloud platform. This investment in Terremark is an indication of the confidence VMware has in our Company and we are proud to have such a strong show of support from this long-term, strategic partner.”
Terremark also released earnings after the bell. We’ll listen in on the conference call and update with more details later.