Skip navigation

Verizon to Acquire Terremark for $1.4 Billion

<img src="/sites/datacenterknowledge.com/files/wp-content/uploads/2010/04/terremark-napota.jpg" width="474" height="342" /> Verizon will acquire colocation and cloud hosting provider Terremark for $1.4 billion in a deal that will accelerate the telecom provider's push into cloud computing. Verizon will pay $19.00 in cash for each share of Terremark, about a 35 percent premium to the stock's closing price of $14.05 a share.

The NAP of the Americas, the huge Terremark data center in downtown Miami. Verizon says it will buy Terremark (and the NAP) for $1.4 billion.

Verizon will acquire colocation and cloud hosting provider Terremark for $1.4 billion in a deal that will accelerate the telecom provider's push into cloud computing. Verizon will pay $19.00 in cash for each share of Terremark, about a 35 percent premium to the stock's closing price of  $14.05 a share.

Verizon (VZ) said the acquisition will accelerate its "everything-as-a-service" cloud computing strategy by adding a portfolio of secure, scalable cloud solutions, along with Terremark's large base of business and government customers. Verizon also gets Terremark's global network of 13 data centers,  including the NAP of the Americas in Miami, the NAP of the Capital Region data fortress in Culpeper, Virginia and facilities in Silicon Valley, Dallas, Amsterdam and Sao Paulo, Brazil.

Verizon plans to operate Terremark (TMRK) as a wholly-owned subsidiary, retaining the company's brand and current management team.

Terremark launched in 2000 by building one of the world's largest data centers, the 750,000 square foot NAP of the Americas. The company survived a brutal downturn in the data center market, and was transformed by two key strategic moves in 2007: the decision to build the Virginia complex, and the acquisition of Data Return and its Infinistructure platform. These two events laid the foundation for the company's success in the government and cloud computing sectors.

The deal builds on a relationship in which Verizon Business has been a major tenant at the NAP of the Capital Region, leasing a large chunk of the third data center building at the Culpeper campus to support its government customers.

"Cloud computing continues to fundamentally alter the way enterprises procure, deploy and manage IT resources, and this combination helps create a tipping point for 'everything-as-a-service,'" said Lowell McAdam, president and chief operating officer of Verizon.

"We are very proud of all we've accomplished in building and developing a world-class business that delivers industry-leading services," said Terremark CEO Manual Medina. "This agreement represents an exciting opportunity to accelerate our strategy and serve our enterprise and government customers with even greater innovation on a global scale with Verizon's resources and extensive reach. We will continue to work with leading hardware, software, systems integrator and carrier partners to build on our unique business model."

The Verizon offer was not the first suitor for Terremark.  in 2008 a potential sale of the company was derailed by the crisis on Wall Street and accompanying credit crunch.  Terremark spent about five months in negotiations and conducting a "market check" to evaluate the fairness of the offer. The Terremark board halted the process in Sept. 2008,  citing problems in the credit markets.

The deal has been approved by both companies' boards and Verizon has also entered into agreements with three stockholders of Terremark to tender their shares into the offer, representing approximately 27.6 percent of the outstanding voting shares of Terremark.

Verizon expects to commence a tender offer between Feb. 10 and Feb. 17 for all shares of common stock of Terremark.  Verizon expects to close the tender offer late in the first quarter of 2011.

TAGS: Verizon
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish