Verizon to Buy Terremark for $1.4 Billion

Verizon has agreed to purchase Terremark, a provider of managed and cloud services, for $1.4 billion.

By Ainsley Jones | Posted Jan 28, 2011
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Verizon will buy Terremark, a provider of managed and cloud services, for $19 a share as a way to quicken the pace of its "everything-as-a-service" cloud strategy. The carrier will increase its net debt by $2 billion to finance the $1.4 billion purchase, according to Reuters.

As a result of the deal, Verizon nets 13 data centers around the world, including facilities in the U.S., Brazil and Netherlands, VentureBeat reports. While the acquisition is being sold as an expansion of Verizon's information technology services for enterprise customers, Stacey Higginbotham at GigaOM notes that the buy strengthens Verizon's ability to not only control the cloud computing infrastructure, but also the pipes between the customer and the cloud.

While this brings about cause for skepticism, officials from both Terremark and Verizon insist the acquisition will not result in any changes for Terremark's carrier-neutral collocation business, says Data Center Knowledge. Terremark CEO Manuel Medina said:

Our business model is not changing. Our carrier-neutral colocation business will continue as is.

Lowell McAdam, president and chief operating officer of Verizon, also noted:

We have very specifically set Terremark up as a wholly-owned subsidiary, and Manny and his team will be independent. We're not going to try to cramp their style at all. There will be no moves to take certain customers out of play.

 

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