Terremark (Nasdaq:TMRK) Soars on Verizon (NYSE:VZ) Bid

Terremark (Nasdaq:TMRK), a provider of cloud and colocation services, was acquired by Verizon (NYSE:VZ) Friday, with the share price of Terremark skyrocketing, as well as other cloud providers such as SAVVIS, Inc. (Nasdaq:SVVS).

Terms of the bid were $19 in cash, which was a 35 percent premium over the closing price of Terremark in the previous trading session. Boards of both companies have unanimously approved the deal.

On an equity value basis, the bid values Terremark at 4.4 times trailing sales and 18.6x trailing EBITDA. The deal is expected to close by the end of the third quarter.

Terremark will operate as a wholly owned but independent subsidiary of Verizon. The existing management team will remain in place. The 220 datacenters currently owned by Verizon will be operationally taken over by Terremark.

Savvis, a competing cloud computing company, as mentioned, was brought into the limelight with the deal, now being considered among the top firms remaining which would be attractive to a competitive suitor of Verizon.

Savvis closed Friday at $30.26, gaining $3.69, or 13.89 percent. Terremark closed at $18.92, up $4.87, or 34.66 percent. Verizon closed at $35.63, losing $0.86, or 2.36 percent.