8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934

Date of Report (Date of earliest event reported): May 24, 2007

TERREMARK WORLDWIDE, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	1-12475	84-0873124
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2601 S. Bayshore Drive
Miami, Florida 33133

(Address of Principal Executive Office)

Registrant’s telephone number, including area code (305) 856-3200

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 240.13e-4(c)) 13e-4(c) under the Exchange Act (17 CFR

ITEM 2.01. Completion of Acquisition or Disposition of Assets.

     On May 24, 2007, Terremark Worldwide, Inc. (the “Company”) completed the transactions contemplated by that certain Interest Purchase Agreement, dated as of May 11, 2007 (the “Purchase Agreement”) by and among Saratoga Partners IV LP, Saratoga Management Company LLC, Saratoga Coinvestment IV LLC, Saratoga Associates IV LLC, certain management sellers party thereto (collectively, the “Sellers”), Data Return LLC (“Data Return”) and the Company, pursuant to which the Company acquired all of the Sellers’ right, title and interest in and to one hundred percent of the outstanding membership interests of Data Return.

     The aggregate purchase price for Data Return was $85 million, subject to adjustment, composed of $70 million in cash, $2.5 million of which has been placed in a two-year escrow to satisfy certain indemnification obligations of the Sellers which may arise from time to time, and $15 million of the Company’s common stock, par value $0.001 (the “Common Stock”), or 1,925,546 shares based on the closing price of the Common Stock on Friday, May 11, 2007 of $7.79 per share.

     The Common Stock to be issued to the Sellers (the “Shares”) in connection with the transactions contemplated by the Purchase Agreement has not been registered under the Securities Act of 1933, as amended (the “Securities Act”) or any state securities laws and may not be sold except in a transaction registered under, or exempt from, the registration provisions of the Securities Act and applicable state securities laws. On May 11, 2007 (the “Effective Date”), the Company entered into a registration rights agreement (the “Registration Rights Agreement”) pursuant to which the Company has agreed for the benefit of the Sellers to use its commercially reasonable efforts to file with the Securities and Exchange Commission (the “Commission”) and cause to become effective a registration statement with respect to the Shares. If the Company fails to (i) file the registration statement with the Commission within 75 days after the Effective Date, (ii) cause the Commission to declare the registration statement effective within 180 days of the Effective Date or (iii) maintain the effectiveness of the registration statement until the earlier of (x) the date that all of the Shares have been sold or (y) the date that all of the Shares may be freely traded without registration under Rule 144 under the Securities Act (provided in each case that such failure is not caused by the holders of such Shares), then the Company shall pay the holders of such shares (a) $50,000 for the first month that such default remains uncured, (b) $75,000 for the second month that such default remains uncured and (c) $100,000 per month for each month that such default remains uncured thereafter, in each such case calculated on a pro rata basis to the date on which such default is cured.

     The foregoing description of each of the (i) Purchase Agreement and (ii) Registration Rights Agreement is only a summary and is qualified in its entirety by reference to the full text of the Purchase Agreement and Registration Rights Agreement, copies of which are incorporated by reference in this Current Report on Form 8-K as Exhibits 10.1 and 10.2, respectively, and are incorporated herein by reference.

ITEM 3.02 Unregistered Sales of Equity Securities.

     See Item 2.01 above. The Shares issued are exempt from registration in reliance upon Section 4(2) of the Securities Act and/or Regulation D of the Securities Act.

ITEM 7.01 Regulation FD Disclosure.

     On May 29, 2007, the Company issued a press release announcing the Company’s completion of the transactions contemplated by the Purchase Agreement pursuant to which it acquired Data Exchange. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

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ITEM 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired

     The financial statements required by this Item will be filed by amendment not later than 71 calendar days after the date that this Report on Form 8-K was due to be filed.

(b) Pro Forma Financial Information

     The financial statements required by this Item will be filed by amendment not later than 71 calendar days after the date that this Report on Form 8-K was due to be filed.

(d) Exhibits

Exhibit
Number		Description
	10.1	Interest Purchase Agreement, dated May 11, 2007, by and among the Company and the Sellers (incorporated by reference to Exhibit 10.1 filed as part of the Company’s Current Report on Form 8-K dated May 11, 2007).
	10.2	Registration Rights Agreement, dated May 11, 2007, by and among the Company and the Sellers (incorporated by reference to Exhibit 10.2 filed as part of the Company’s Current Report on Form 8-K dated May 11, 2007).
	99.1	Press Release issued by the Company on May 29, 2007.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TERREMARK WORLDWIDE, INC.
Date: May 29, 2007	By:	/s/ Jose A. Segrera
		Jose A. Segrera
		Chief Financial Officer

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EXHIBIT INDEX

Exhibit
Number		Description
	10.1	Interest Purchase Agreement, dated May 11, 2007, by and among the Company and the Sellers (incorporated by reference to Exhibit 10.1 filed as part of the Company’s Current Report on Form 8-K dated May 11, 2007).
	10.2	Registration Rights Agreement, dated May 11, 2007, by and among the Company and the Sellers (incorporated by reference to Exhibit 10.2 filed as part of the Company’s Current Report on Form 8-K dated May 11, 2007).
	99.1	Press Release issued by the Company on May 29, 2007.

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EX-99.1

For Immediate Release

TERREMARK WORLDWIDE COMPLETES
ACQUISITION OF DATA RETURN

• Strong Economics of Data Return’s Infinistructure™ Utility Computing Architecture and digitalOps^® Systems Management Platform Drive Increased Revenue Yield

• Cross-Selling of Combined Customer Base Accelerates Market Penetration

Miami, FL. — May 29, 2007 — 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.

Contacts:

Terremark Worldwide, Inc., Miami	Media Relations
Sandra González-Levy	Edelman
305-860-7829	Brad Pick
sgonzalez-levy@terremark.com	305-358-3767
	brad.pick@edelman.com
Investor Relations
JoAnn Horne
415-445-3233
joann@marketstreetpartners.com