A day after Verizon Communications noted that cloud computing is a key cog in its growth strategy, the telecommunications giant said yesterday it has signed a deal to acquire Terremark, which provides cloud services and data center hosting.
The $1.4 billion price tag for Terremark works out to be $19 a share in cash. Terremark closed at $14.05 yesterday before the acquisition was announced. In many respects, the Verizon move makes a lot of sense. Miami-based Terremark is a much less expensive takeout target than Savvis or Rackspace would be for Verizon. Meanwhile, Verizon can use its army of sales people–remember MCI is part of the company–to sell cloud services.
With the move, Verizon said it will accelerate its “everything-as-a-service cloud strategy.” As a bonus, Verizon will get access to Terremark’s government customer base. Terremark has 13 data centers in the U.S., Europe, and Latin America.