In a surprise acquisition, telecommunications giant Verizon (NYSE:VZ, news, filings) announced today that it has agreed to purchase colocation and cloud provider Terremark (news, filings) [a subsidiary of Verizon (NYSE:VZ, news, filings)] for $19 per share, or $1.4B. That’s a 35% premium above Terremark’s $14.05 closing price. Terremark’s board has already approved the purchase, but just to make doubly sure, Verizon is in the midst of acquiring 27.6% of the company’s stock from several large shareholders.
Terremark’s recent focus has been on cloud services, especially those aimed at serving the federal marketplace, and they have been making much more progress than I had thought they would. But that effort is still young, and the company’s largest revenue sources are from carrier-neutral colocation and related services, as they operate a substantial amount of square footage in Miami and in Northern Virginia, as well as other facilities in Europe, Latin America, Dallas, and Santa Clara.
But I think that Verizon’s aim here is squarely on the cloud services front, especially the Federal customer base. And now that Verizon has pounced in such a big way, we may see other similar assets get attention from its ILEC and PTT peers. All are working on Whatever-as-a-Service offerings in earnest.
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