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Acquisition of Spectrum Telecommunications
Launches Terremark's Emerging Market Strategy in Latin America
Terremark Worldwide, Inc. (AMEX:TWW), announced today the signing of a binding
contract to acquire Spectrum Telecommunications Corp., a privately held,
Miami-based telecommunications company operating in four Latin American
countries. The acquisition of Spectrum is Terremark's first step in the
implementation of its emerging market strategy in Latin America. Using
Spectrum's existing operations and network of personnel, in-country partners,
equipment and customers in Latin America, Terremark intends to build a next
generation telco to provide telecommunications services and infrastructure
throughout Latin America.
Today, Spectrum is a two-year-old provider of telecommunications services with
operations in Argentina, Brazil, Chile and Peru. Spectrum's existing business,
and its plan for expansion throughout South America, closely follow Terremark's
emerging market strategy for Latin America and Asia. Specifically, Terremark
plans to become a next generation provider of telecommunications services and
facilities in these markets by building a sales force and, in turn, a customer
base, starting with the larger sub-markets and then moving into the second and
third tier sub-markets on each of these two continents. In Latin America, using
Spectrum's existing operations and building on its established in-country
partnerships, Terremark plans to provide Voice over Internet Protocol ("VoIP")
and other value-added services to corporate and business customers, internet
service providers and other carriers.
Leveraging off of the existing Spectrum in-country sales forces and customer
bases, Terremark plans to simultaneously expand Spectrum's network
infrastructure and operations in the region to create its own Internet Protocol
("IP") network over which it plans to provide VoIP and other value-added
services to a growing customer base at both the retail and wholesale levels. The
emerging market strategy also includes the development of telecommunications
facilities (i.e., as Terremark is currently doing domestically through its T-Rex
subsidiary), more commonly known as data centers in Latin America and Asia,
which would serve Terremark's own IP network and be available to other telcos,
Internet providers, hosting companies and the like in need of co-location space
in Latin America. The result will be a vertically integrated telecommunications
company with operations from the retail level, down to wholesale, including
having its own sales force, and owning it own equipment, infrastructure,
licenses, facilities and data centers. Spectrum's existing sales force, customer
base, in-country subsidiaries, relationships and networks will serve as the
starting point for the implementation of Terremark's emerging market strategy in
Latin America.
"We founded Spectrum less than two years ago to take advantage of what we are
convinced is one of the most powerful telecommunications opportunities in the
world today: Latin America," said Guillermo Amore, CEO of Spectrum. "South and
Central America, Mexico and the Caribbean represent an enormous opportunity, one
where penetration is minimal, demand is set to sky rocket and supply is already
lagging behind. With deregulation occurring in nearly every significant Latin
American country over the next 24 months, we expect the region to become the
fastest growing telecommunications opportunity in the world, rivaled only by the
potential in Asia. By getting into this market early and starting with larger
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countries first, we believe Spectrum has positioned itself very well. Now, by
joining with Terremark Worldwide, we are able to merge the resources and
relationships of both companies to allow for a much faster roll out of our
business plan," continued Amore, who has dedicated his life to the
telecommunications industry. For more than 30 years, Amore was a senior
executive with GTE Corporation, where his last position was Senior Vice
President in charge of GTE's International Telephone Operations. For the last
two years, Amore has devoted himself to leading the Spectrum team in building a
new generation telecommunications company for Latin America. Mr. Amore will
continue as Spectrum's CEO and work closely with Terremark's Communications
Group to implement Terremark's emerging market strategy throughout Latin
America. "I am truly excited to join the Terremark team and work with Manny and
the rest of TWW to implement the balance of our Latin American strategy," said
Amore, when asked about the transaction.
"Latin America is a logical target for Terremark's emerging market strategy. In
addition to the opportunities available in the region generally, Terremark has
been building business and political relationships in Latin America for twenty
years and has its own extensive network of investors, partners, and contacts
throughout the continent. It has literally been Terremark's backyard. Now,
Spectrum will be Terremark's first step and a key component to our emerging
market telecommunications strategy in Latin America," said Manuel D. Medina,
Chairman and CEO of Terremark Worldwide, Inc. "We are very pleased with our deal
to acquire Spectrum and particularly excited to bring Guillermo Amore to the
Terremark team."
The contract signed today between Terremark and all of Spectrum's shareholders
provides for Terremark to immediately acquire 80% of Spectrum's shares in
exchange for an undisclosed number of newly issued Terremark Worldwide common
stock, with the current shareholders, including Amore, retaining 20%. It is
anticipated that the contract will close on or before August 31, 2000.
Terremark Worldwide, Inc. (AMEX:TWW) is a publicly held, international company
with subsidiaries and ventures providing network and value added
telecommunications services; data, Internet and telecommunications switching and
computer housing facilities; and a full range of real estate services (including
development, construction, leasing, mortgage brokerage, property management and
hotel management) for telecom facilities and more traditional commercial and
high rise residential real estate. Terremark is headquartered at 2601 S.
Bayshore Drive, 9th Floor, Miami, Florida (305) 856-3200, and has offices in
several other locations, including New York and Washington, D.C. More
information can be found on Terremark Worldwide, Inc at
http://www.terremark.com.
This press release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties or other factors which
may cause actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Factors that might
cause such a difference include, without limitation, relationships with the
Company's partners, political instability in countries in which the Company does
business, the Company's ability to obtain proper funding for its business plan,
decline in demand for the Company's services or products, the effect of general
economic conditions generally, factors affecting real estate development or
telecommunications and other risks and uncertainties detailed from time to time
in the Company's Securities and Exchange Commission filings.
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