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
NEW YORK (
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:
>To submit a news tip, send an email to: