Jan 28, 2011 : Verizon to Acquire Terremark

📅 January 28, 2011 - Acquisition will accelerate 'everything as a service' strategy by leveraging the companies' collective strengths.

Verizon Communications Inc., a provider of communications services, yesterday announced a definitive agreement with Terremark Worldwide, Inc., an operator of integrated Tier-1 internet exchanges and a provider of managed IT infrastructure solutions to government and private sectors, under which it will acquire Terremark for $19.00 per share in cash, or a total equity value of $1.4 billion.

The company articulates that pursuant to the agreement, it anticipates that it will commence a tender offer between February 10, 2011 and February 17, 2011 for all shares of common stock of Terremark. The tender offer price constitutes a premium of 35 percent per share over yesterday's closing price. The transaction is subject to the valid tender of a majority of the shares of Terremark; the expiration or early termination of the Hart-Scott-Rodino antitrust waiting period; and other customary closing conditions. The board of directors of Terremark has unanimously approved the transaction, and the transaction was unanimously approved by the directors of the company present and voting. It 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. The company expects to close the tender offer late in the first quarter of 2011.

It claims that this transaction will accelerate the company's 'everything-as-a-service' cloud strategy by delivering a portfolio of secure, scalable on-demand solutions to business and government customers globally through a unified enterprise IT platform and unique business cloud offerings that leverage the companies' collective strengths. The company adds that it plans to operate the new unit as a wholly owned subsidiary retaining the Terremark name and with its current management team continuing to manage the company.

The company states that headquartered in Miami, Terremark is a widely recognized Infrastructure-as-a-Service provider with a proven track record of delivering cloud-based resources with high levels of security and availability in the industry. Operating 13 data centers in the U.S., Europe and Latin America, Terremark combines secure cloud computing, colocation, and managed hosting services into a seamless hybrid environment. Its Enterprise Cloud platform provides some of the world's largest companies and U.S. government agencies with on-demand access to secure and reliable computing resources. It avers that it was represented by Goldman Sachs and Weil, Gotshal & Manges, and Terremark was represented by Credit Suisse Securities (USA) LLC and Greenberg Traurig.

"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. "Our collective vision will foster innovation, enhance business processes and dynamically deliver business intelligence and collaboration services to anyone, anywhere and on any device."

Manuel D. Medina, Chairman and CEO of Terremark, said, "This transaction, first and foremost, provides Terremark's stockholders with the opportunity for immediate, maximum value and liquidity for their investment in our common stock. We are very proud of all we've accomplished in building and developing a world-class business that delivers industry-leading services. 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."