This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Verizon Digs Deep for Terremark

NEW YORK ( TheStreet) -- Verizon Communications (VZ - Get Report) showed it's serious about making an aggressive push into cloud computing Thursday, agreeing to acquire Terremark Worldwide (TMRK) for $1.4 billion in cash.

The deal values Terremark shares at $19 each, a premium of 35% to the stock's regular session closing price of $14.05, and 28% above a 52-week high of $14.85 set on Jan. 12. Terremark shares had risen more than 60% in the past year prior to the deal's announcement, which sent them as high as $19.28 in brisk after-hours action.

Verizon, a Dow component whose stock is up 22% over the past 52 weeks, said it plans to conduct a tender offer for Terremark's common shares from Feb. 10 through Feb. 17. Completion of the transaction remains subject to the valid tender of the majority of Terremark's stock, as well as other customary closing conditions.

"This transaction will accelerate Verizon's "everything-as-a-service" cloud strategy by delivering a powerful portfolio of highly 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," Verizon said in a press release after the closing bell.

Upon closing the deal, Verizon said it expects to operate Terremark as a wholly owned unit and retain its brand name.

Based in Miami, Terremark operates data centers in the United States, Europe and Latin America, providing managed information technology services, including hosting, disaster recovery, security and colocation. The company reported a loss of $7.7 million, or 12 cents a share, on revenue of $84.9 million for its fiscal second quarter ended in September. EBITDA (earnings before interest, taxes, depreciation and amortization) was up 28% year-over-year in the quarter to $22.9 million.

Terremark is scheduled to report its fiscal third-quarter results on Feb. 9. The current average estimate of analysts polled by Thomson Reuters is for a loss of 10 cents a share in the December period on revenue of $90.8 million.

-- Written by Michael Baron in New York.

>To contact the writer of this article, click here: Michael Baron.

>To submit a news tip, send an email to:
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
VZ $50.68 0.00%
AAPL $95.18 0.00%
FB $117.43 0.00%
GOOG $692.36 0.00%
TSLA $232.32 0.00%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs