Verizon to buy Miami-based Terremark

Published Friday, January 28, 2011 7:00 am
by Bridget Carey

Miami's largest technology service provider, Terremark Worldwide, is being acquired by Verizon Communications for $1.4 billion, the company announced Thursday.

Verizon paid $19 a share for Terremark's stock, which closed at $14.05 Thursday. Terremark will now become a wholly owned subsidiary under Verizon, keeping its name, its employees and headquarters in Miami.

``At the end of the day it's the same business, but now with a big brother,'' said Terremark CEO Manuel D. ``Manny'' Medina.

And, Medina says, that big brother will help grow Terremark ``very quickly,'' with interest in expanding the business further with the federal government, Asia Pacific and Latin America. Terremark, which Medina founded in 1982 as real estate firm, operates 13 data centers in the United States, Europe and Latin America.

The purchase shows Verizon's serious push to grow its cloud computing business -- jargon for renting computing storage and power from another provider on the Web. Verizon operates more than 220 data centers across 23 countries.

Verizon was one of Terremark's largest clients. In June, a Verizon subsidiary agreed to lease 25,000 square feet of co-location space in Terremark's NAP of the Americas in Miami and the NAP of the Capital Region in Culpeper, Va.

Back then, Medina said in a statement: ``Our agreement with Verizon signifies a defining moment for Terremark.''

In September, Verizon began offering a cloud computing service for small and medium businesses called ``Computing as a Service, SMB,'' which was managed out of Terremark's data centers.

Terremark handles a variety of different technology services for companies, the majority of it being managed services like website hosting, security services and cloudcomputing. About a third of its business comes from companies who rent space in its data centers.

Analysts have hailed Terremark as a technology leader in the cloud computing space, and it was also praised by the U.S. government, which began using Terremark in 2009 to power USA.gov and Data.gov.

Terremark Worldwide had the second best performing stock of a South Florida business for 2010, rising 89.3 percent.

Medina will receive about $83 million out of the Verizon deal from his 4.4 million shares, almost 7 percent of the company.

Medina said Verizon's ownership will not effect any of Terremark's clientele that may be competitors with Verizon, and that Terremark will remain ``neutral.''

Greenberg Traurig, led by Jaret L. Davis, co-managing shareholder of the firm's Miami office, and shareholder Clifford E. Neimeth, chair of the firm's New York mergers and acquisitions practice, and Credit Suisse Securities, represented Terremark in the deal.Verizon was represented by Goldman Sachs and Weil, Gotshal & Manges.
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