Verizon Targets Amazon's Cloud with $14 Billion Terremark AcquisitionBy CIOinsight | Posted 01-28-2011
Verizon Communications is acquiring Terremark Worldwide for $1.4 billion to enhance its cloud-computing capabilities, the companies said Jan. 27.
The acquisition of the Miami-based cloud services and data-center-hosting provider will expand Verizon's ability to provide IT services to corporate customers. Terremark currently has 13 data centers scattered throughout the United States, Europe and Latin America, and offers IAAS (Infrastructure as a Service), security and managed services. Verizon will be competing with major cloud-services players such as Amazon.
The deal would "accelerate Verizon's 'everything-as-a-service' cloud strategy," Lowell McAdam, Verizon's president and COO, said on a call with investors on Jan. 28. Verizon currently operates more than 220 data centers across 23 countries.
"We have viewed this space for a long time as a place we want to grow our business," McAdam said.
Verizon will be tendering an offer for all shares of Terremark at $19 a share between Feb. 10 and Feb. 17, Fran Shammo, Verizon's CFO, said on the call. The price is a 35 percent premium over Terremark's closing price of $14.05 just before the acquisition was announced. The all-cash deal will increase Verizon's net debt by $2 billion, Shammo said. The two-step merger is expected to close within 90 days, he said.
For more, read the eWeek article: Verizon Buys Terremark for $1.4B in Amazon Cloud Play.