January 28, 2011 / 2:34 PM / 8 years ago

Analysts raise Terremark target price on Verizon buyout

* Evercore, Kaufman Bros up target price to $19

* Deal seen as positive for peers Equinix and Savvis

* Terremark shares up 36 pct in premarket trade

Jan 28 (Reuters) - At least two brokerages raised their share-price target on Terremark Worldwide Inc TMRK.O on Friday, a day after U.S. phone company Verizon Communications (VZ.N) said it plans to buy the IT services provider in a deal worth $1.4 billion.

Miami-based Terremark deals with IT outsourcing, and helps companies adopt cloud computing — an increasingly popular technology that allows remote access to computing power and data over the Internet.

“We continue to see a high likelihood for further merger and acquisition activity in the data center services space,” Evercore Partners analyst Jonathan Schildkraut said.

Kaufman Bros said the deal will give Verizon good opportunities with the federal government.

“We believe the transaction could result in multiple expansion for other datacenter and/or hosting companies, such as Equinix Inc (EQIX.O) and Savvis Inc SVVS.O,” Piper Jaffray said in a note to clients.

The proposed deal comes after Equinix bought Switch and Data Facilities Co in May and highlighted how the subsector is one of the fastest growing and most attractive areas in telecoms.

Terremark’s shares, which have gained two-thirds in value over the last one year, were up 36 percent at $19.13 in premarket trade.

The Verizon offer represented a 35 percent premium over Terremark’s closing price of $14.05 on Thursday.

Peer Equinix’s shares were up 6 percent at $92.57, while those of Savvis were up 16 percent at $30.85.

(Reporting by Saqib Iqbal Ahmed in Bangalore; Editing by Maju Samuel)

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