In a move that will decisively reshape the rapidly evolving global business technology solutions market, Verizon Communications Inc. and Terremark Worldwide Inc. have announced a definitive agreement under which Verizon will acquire Terremark, a global provider of managed IT infrastructure and cloud services, for $19.00 per share in cash, or a total equity value of $1.4 billion.
Pursuant to the agreement, Verizon anticipates that it will commence a tender offer between Feb. 10, 2011, and Feb. 17, 2011, for all shares of common stock of Terremark. The tender offer price constitutes a premium of 35 percent per share over today'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 Verizon present and voting. Verizon 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. Verizon expects to close the tender offer late in the first quarter of 2011.
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 plans to operate the new unit as a wholly owned subsidiary retaining the Terremark name and with Terremark's current management team continuing to manage the company.
"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."