Verizon Communications Inc. · NYSE:VZ
Verizon Communications — Merger or Acquisition (January 2011)
15 slides from Verizon Communications's merger presentation, Jan 28, 2011
Slide 1: Verizon Acquisition of Terremark
Verizon Acquisition of Terremark January 28, 2011
Slide 2: Agenda
Agenda Lowell McAdam Strategic Overview President & Chief Operating Officer Verizon Communications Manuel D. Medina Terremark Overview Chief Executive Officer & Chairman Terremark Worldwide Fran Shammo Financial Review Chief Financial Officer Verizon Communications Lowell McAdam Summary President &
Slide 3: “Safe Harbor” Statement
“Safe Harbor” Statement NOTE: This presentation contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Pri
Slide 4: “Safe Harbor” Statement
“Safe Harbor” Statement Please note that slides related to today's call are available on Terremark's Web site, at www.Terremark.com under the investor relations link. During our call today, we will be making forward-looking statements. Any statements that refer to expectations, projections, or other
Slide 5: Note
Note • Verizon intends to file an offer to purchase and Terremark intends to file a proxy statement, and other materials with the Securities and Exchange Commission (“SEC”) in connection with the proposed transaction. We urge investors to read these documents when they become available because they
Slide 6: Today’s News
Today’s News • Verizon is acquiring Terremark • Terremark will be a separate subsidiary delivering enterprise IT platform solutions • Together Verizon and Terremark will be the preeminent business class cloud partner for enterprises and governments of all sizes, around the globe • Commitment to agil
Slide 7: Verizon’s Capabilities
Verizon’s Capabilities • Premier Global Network Service Provider Global Network • Offices in 75 countries • Over 3,000 Professional Service consultants • IP Network in 2,700 Professional Services cities, 159 countries • #1 in Security Services • ~200 Data Centers – 5 Smart Data Centers Security – 16
Slide 8: Strategic Overview
Strategic Overview This combination creates a tipping point for ‘everything-as-a-service’ through a unified enterprise IT platform and unique business cloud offerings leveraging the companies’ collective strengths. A Verizon Company • Global portfolio of advanced • Leading global provider of • Leadi
Slide 9: Terremark’s Capabilities
Terremark’s Capabilities FY 2Q ’11 Revenue Mix • Colocation Exchange Point 6% – Space, power and a secure 44% Colocation environment for clients’ IT equipment • Managed Services Managed Services 50% – Encompasses design, deployment, operation, monitoring and management of clients' IT infrastructure
Slide 10: Terremark’s Strategic Global Footprint
Terremark’s Strategic Global Footprint Key Highlights • Data centers in the United States, Europe and Latin America • Flagship Facilities: – NAP of the Americas (Miami) – NAP of the Capital region “NCR” (Culpeper) – NAP West (Santa Clara) Amsterdam Brussels • 567k net sq. feet available as of 2Q San
Slide 11: Value Drivers
Value Drivers • Revenue synergies – Terremark services sold though more expansive Verizon channels – Verizon services sold through Terremark’s Federal and Latin American channels – Accelerated product development and cloud migration • Operating expense synergies – SG&A savings – Reduced network cost
Slide 12: Key Transaction Terms
Key Transaction Terms • $19.00 per Terremark common share • $1.4B total equity value • Tender offer and second step merger • Hart-Scott-Rodino approval and customary closing conditions Expect tender offer to commence February 10 – 17, 2011 12
Slide 13: Financing
Financing • Verizon will finance the transaction through a combination of cash and debt – Initial increase of $2B in Verizon net debt to finance transaction • Anticipate that Terremark secured debt will be refinanced – $470M of secured bonds with 12% coupon – $75M of secured bonds with 9.5% coupon N
Slide 14: Financial Impact
Financial Impact • Synergies of approximately $500M (NPV) driven by revenue lift, expense opportunities and capital savings • Neutral to EPS near-term, accretive longer-term • No material near-term impact on operating cash flow Significant value creation 14
Slide 15: Summary
Summary • Strategic addition to evolving service stack • Operated as a separate unit with existing brand and management • Expands and enhances existing capabilities and addressable market • Accelerates progress on strategic initiatives • Positions Verizon to win as enterprises undergo IT consumption
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