MIAMI----Terremark Worldwide, Inc. Nasdaq:TMRK:
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Strong Economics of Data Return’s
Infinistructure™ Utility Computing
Architecture and digitalOps® Systems
Management Platform Drive Increased Revenue Yield
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Cross-Selling of Combined Customer Base Accelerates Market
Penetration
Terremark Worldwide, Inc. Nasdaq:TMRK the leading global operator of
carrier-neutral integrated Internet Exchanges and provider of managed IT
infrastructure solutions utilizing cutting edge virtualization and
utility computing technologies, today announced that it has completed
the acquisition of Data Return, LLC. Data Return is an established
leader in the field of managed services and a pioneer in leveraging the
power of virtualization to provide utility-enabled managed solutions.
The company is positioned in the Leaders Quadrant of Gartner’s
2006 North American Web Hosting Magic Quadrant along with such companies
as IBM and AT&T.
“Although corporate and government leaders
have already embraced the value of virtualization in IT environments,
this trend is just beginning and we see tremendous market opportunities
to deliver virtualized IT solutions to enterprises and government
customers,” said Manuel D. Medina, Terremark’s
Chairman and CEO. “Two of the most compelling
value propositions for virtualized infrastructure solutions are the
immediate reductions in total cost of ownership and simplified business
continuity and disaster recovery considerations. We see numerous
opportunities to cross-sell the new combined customer base, including
both enterprise and Federal government customers, and we expect the
addition of Data Return to allow us to increase square foot revenue
yields within our facilities.”
Medina continued, “With the acquisition of
Data Return, the majority of our revenue base is now managed services,
precisely aligned with our vision that data center space represents only
one component of a fully managed IT solution.”
Value of Data Return’s
Managed Service Offerings
Data Return’s enterprise-class managed
hosting solutions offer compelling unit economics, with annual revenue
yields ranging from $12,000 per square foot to over $15,000 per square
foot and gross profit margins ranging from 40% to 60%. These revenue
yields represent a significant increase over Terremark’s
current annual revenue yield of approximately $1,500 per square foot.
For the calendar year 2006, Data Return posted revenues of approximately
$55 million and has experienced acceleration in new bookings over the
past several quarters due to its superior product set coupled with the
strong trends driving the industry, including the proliferation of the
Internet, Web 2.0, and regulatory drivers, as well as the increasing
desire to outsource IT infrastructure requirements.
Terremark will maintain Data Return’s offices
and Network Operations Center in Dallas, Texas, complementing and
providing additional redundancy to current Terremark’s
operations in Florida, Virginia and California.
Terremark Financing Update
Over the past 90 days, Terremark has been executing its three step
financing plan. The first step was completed during March 2007 when
Terremark raised approximately $90 million in a secondary equity
offering. The second step completed during April 2007 was a private
exchange in which a majority of its 9% convertible notes were exchanged
for 6.625% notes with an extended maturity date of June 2013, while
maintaining the $12.50 per share conversion price. The third step in
Terremark’s plan is the refinancing of its
existing Mortgage Debt and Senior Notes. Terremark’s
NAP of the Americas facility in Miami was recently appraised at a value
of approximately $250 million. The company intends to leverage this
strategic asset to i accomplish this refinancing and ii raise
additional debt capital to complete the funding of its planned
expansions in Culpeper, Virginia and Silicon Valley.
Terremark will provide additional information regarding the Data Return
acquisition; debt refinancing; geographic expansion plans and its
revised outlook for fiscal year 2008 on its regular earnings conference
call scheduled for June 14, 2007.
About Terremark Worldwide, Inc.
Terremark Worldwide, Inc. Nasdaq:TMRK is the leading global operator
of carrier-neutral integrated Internet Exchanges and provider of managed
IT infrastructure solutions utilizing cutting edge virtualization and
utility computing technologies. Terremark provides the ultimate in
managed IT services to customers around the world, delivering its
portfolio of services from the United States, Europe and Latin America.
Terremark’s utility computing platform,
Infinistructure™, has redefined the standards
for scalable, flexible, high-performance managed infrastructure, and its
innovative digitalOps® service delivery
platform provides a comprehensive systems management solution for
mission-critical IT operations. Terremark delivers a complete range of
solutions from collocation, exchange point, managed hosting and security
services, to a suite of fully managed IT solutions for government and
enterprise. More information about Terremark Worldwide can be found at http://www.terremark.com.
Statements contained in this press release may constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Terremark's actual results may
differ materially from those set forth in the forward-looking statements
due to a number of risks, ability to cross-sell across an acquired
customer base, ability to increase revenue yields within facilities,
ability to refinance existing debt, uncertainties and other factors, as
discussed in Terremark's filings with the SEC. These factors include,
without limitation, Terremark's ability to obtain funding for its
business plans, uncertainty in the demand for Terremark's services or
products and Terremark's ability to manage its growth. Terremark does
not assume any obligation to update these forward-looking statements.
