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Verizon To Acquire Terremark in $1.4 Billion Deal

January 27, 2011 - News

Verizon Communications Inc. on Thursday announced an agreement to acquire Terremark, a managed IT infrastructure services provider that operates data centers throughout the world.

Verizon said it plans to acquire Miami-based Terremark for $19.00 per share in cash for a total value of $1.4 billion.

Operating 13 data centers in the U.S., Europe and Latin America, Terremark provides cloud computing, collocation and managed hosting services.

Verizon said it plans to close its tender offer for Terremark’s common shares late in the first quarter.

In a research note, principal analyst Steve Hilton of London-based Analysys Mason said the acquisition reflects the transformation of communications companies like Verizon into technology providers.

Hilton also said the acquisition will give Verizon’s business operations “a stronger foothold in Europe and Latin America."

New York-based Verizon said it plans to retain the Terremark moniker and operate the unit as a wholly owned subsidiary. Terremark’s management will continue to run the company, Verizon added.

Hilton indicated Verizon must give Terremark some autonomy.

“If the Terremark assets and teams are swallowed into the corporate morass of legacy Verizon, surely this will be another example of a squandered acquisition opportunity," he said.

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