06-11-2015, 21:51 #1
[EN] Verizon avaliando venda da Terremark, reporta Thomson Reuters
Report: Verizon Is Exploring Selling Its Enterprise Business Assets For $10 Billion
by Gina Narcisi on November 6, 2015, 4:32 pm EST
Telecommunications heavyweight Verizon could be shopping around its enterprise business in a potential deal worth upwards of $10 billion, according to a story published Friday by Thomson Reuters.
According to unnamed sources close to the matter cited by Reuters, the potential sale of Verizon's enterprise assets that the carrier is "exploring" would include the former MCI business, a landline and Internet service for business customers that Verizon acquired in 2005, as well as the company's data center unit, Terremark, which the carrier scooped up in 2011.
Verizon declined to comment for this story.
One concerned Verizon partner who requested anonymity said that upon hearing the rumor, the partner reached out to Verizon executives, who said there were "zero plans for Verizon to sell off Terremark or any of its enterprise infrastructure."
The carrier assured the partner that if anything, it is growing that business and looking for acquisition opportunities, especially in the cloud, the partner said.
"It would obviously have an impact on us as a partner, but we were assured it would not happen," the partner said.
This isn't the first time Atrion Networking, a Warwick, R.I.-based IT solution provider and Verizon partner, has heard rumors that Verizon might sell some of its assets.
"My initial reaction was, 'Wow, I can't believe this could happen,' just because of how impactful it would be for our business. Verizon is such a powerful name," said Darryl Senese, vice president of carrier services for Atrion Networking. "But when you start peeling the onion back a bit and you look at the potential impact, my opinion is that this would be very unrealistic."
Even if Verizon was seriously shopping around its business assets, the numbers don't add up, Senese said. Because Verizon acquired Terremark for $1.4 billion and MCI for nearly $6.8 billion, and because Verizon has added value to those assets since acquiring them, the carrier's own business assets would be worth more than $10 billion, he said.
"Ten billion [dollars] is such a small dent in what this business is really worth," Senese said. "I find it hard to believe [Verizon] would consider this."
Verizon also has many federal government customers, including the U.S. Department of Defense, who would have a say in the sale, not to mention the regulatory approvals the deal would run up against, Senese added.
"These government customers would obviously have to feel comfortable with whoever would be purchasing the assets, and I think that would really be difficult to pull off," he said.
The reported possible Verizon sales are leaving some in the industry wondering if this is indicative of more consolidation, coming on the heels of telecommunications provider Windstream's selling its data center operations to colocation provider TierPoint last month, and CenturyLink's saying it is exploring the sale of its own data center assets and colocation business this week.
But unlike Windstream and CenturyLink, which arguably have sold or are considering the sale of some of their assets to focus on their core businesses, Verizon's core business -- wireless -- wouldn't work without the wireline assets that the carrier is reportedly considering selling, according to Senese.
"Verizon would have to purchase wireline assets from [another provider] and who knows what the impact would be to wireless," Senese said. That’s because Verizon wouldn't own or have control over those wireline assets.
"This [rumored sale] almost contradicts what Verizon wants to do," he said. "It would be hard to pull off, but anything is possible in any industry."
06-11-2015, 21:59 #2
Exclusive: Verizon weighing $10 billion sale of enterprise assets - sourcesNEW YORK | By Liana B. Baker and Greg Roumeliotis
Fri Nov 6, 2015 3:07pm EST
Verizon Communications Inc is exploring a sale of its enterprise assets which could be worth as much as $10 billion, according to people familiar with the matter, as the largest U.S. wireless carrier seeks to focus on its core business.
The sale would include the business formerly known as MCI, which provides landline and Internet services for large business customers, as well as Terremark, its data center unit, the people said this week.
The businesses have struggled to keep up with advances in cloud computing, and face fierce price competition from players such as Alphabet Inc and Amazon.com Inc.
Verizon's enterprise assets might not be easy to separate and any potential buyer would likely have to sign commercial agreements with the company, some of the people said. Verizon is still considering how some of these asset sales could best be structured and no deal is imminent, the people added.
Wireline provider CenturyLink Inc was in talks with Verizon earlier this year to buy some of the assets but could not agree on terms, the people said. In a strategy shift, CenturyLink announced this week it would instead explore options for some of its data centers, including possibly selling them.
Citigroup Inc has been advising Verizon on the possible sale of the assets, which have estimated annual earnings before interest, taxes, depreciation and amortization of around $2 billion, the people added.
The sources asked not to be identified because the matter is confidential. Verizon, CenturyLink and Citigroup declined to comment.
The enterprise telecommunications industry has had to adapt in recent years to corporate customers seeking more sophisticated and cheaper offerings to manage their data.
AT&T Inc has been exploring a sale of its data center assets for some time, while Windstream Holdings Inc sold its data center business for $575 million to TierPoint last month.
Verizon Chief Financial Officer Fran Shammo said, during the company's third-quarter earnings call on Oct. 20, that it continues "to work through secular and economic challenges" with its global enterprise division, which posted a 4.9 percent decline in revenue in the quarter ended Sept. 30.
Verizon's $8.4 billion acquisition of MCI was completed in 2006 following a fierce bidding war with Qwest Communications, which is now part of CenturyLink. It acquired Terremark Worldwide Inc in 2011 for $1.4 billion.
Verizon has been looking to sell other non-core assets as well. In February, it announced the sale of residential landline assets to Frontier Communications for $10.54 billion, and unloaded its tower portfolio for more than $5 billion.
(Reporting by Liana B. Baker and Greg Roumeliotis in New York; Additional reporting by Malathi Nayak; Editing by Richard Chang)
07-11-2015, 07:33 #3
Verizon to Sell Terremark?
May 20th, 2015 by Rob Powell
Rich Tehrani over on his TMCnet blog has a source telling him that Verizon is looking to sell or spin off its Terremark cloud arm and focus on mobile. Also supposedly on the block is Verizon's PBX reseller division, leaving them only their Broadsoft-powered hosted PBX platform.
I have no idea if the rumor is true or whether they would find buyers willing to meet them on price if they did. But I find it fascinating that Verizon would want to sell the cloud division and the data center footprint. That they wish they could spend every penny on mobile I understand. However, one has to see the cloud as a part of the mobile ecosystem that even if one might be able to do without today, one wouldn't want to lack it tomorrow. Verizon just agreed to buy AOL to get more into content and advertising, but is interested in getting rid of where it lives? The Terremark purchase has always seemed like one of their better, longer-thinking moves to me.
Verizon is almost defined more by what it doesn't want these days. It doesn't want to own copper, let alone maintain and upgrade it. It doesn't want towers, even if others do love them a whole lot these days. It wishes it hadn't built FiOS and doesn't want to build more of it. It doesn't really have an interest in mobile markets outside the USA, and it definitely doesn't want to share Verizon Wireless with anybody. And now, perhaps, it doesn't want data centers or the cloud or any legacy PBX. It's getting to be a bit like that old SNL skit, "If it's not Scottish, it's crap!" but with post-paid US mobile subscribers who read the Huffington Post.
If the rumor is true though, I do agree that CenturyLink does make plenty of sense as a buyer. I rather think they'd jump at the chance, in fact. They didn't pull the trigger for Rackspace, but Terremark is more about the underlying assets and larger customers than Rackspace is, and therefore probably easier to integrate with the business they have built off of Savvis by sprinkling it with acquired nextgen cloud talent. On the other hand, I'll bet private equity would love a chance to get its hands on Terremark as well.