Tuesday, April 26, 2011

CenturyLink to Acquire SAVVIS for Data Center Business

CenturyLink will acquire Savvis in a cash and stock merger valued at $40 per share, or a total of approximately $2.5 billion, plus net debt of approximately $0.7 billion which will be assumed or refinanced at close.

SAVVIS, which is based in St. Louis, provides managed services, colocation and network services for enterprise customers. It has 2,500 global clients, most under long term contract. Its managed hosting business is growing at around 25% per year. The company has 2,450 employees and 31 data centers.

CenturyLink said the deal gives it greater scale for delivering managed hosting and colocation services. Together, CenturyLink and Savvis will operate 48 data centers located in North America, Europe, and Asia with more than 1.9 million square feet of gross floor space; a national 207,000 route mile fiber network; a 190,000 mile global access network; and have a customer list that includes a majority of the Fortune 500 and Fortune 1000 companies.

"The transaction creates a premier managed hosting and colocation provider with global scale in a high growth sector, and is expected to be accretive to revenue growth and cash flow per share," said Glen F. Post, III, CenturyLink chief executive officer and president. "Today, businesses are shifting the way they manage their information technology services and infrastructure, and this transaction helps us meet these needs by offering Savvis' leading products and services coupled with CenturyLink's network.

Savvis stockholders will receive $30 per share in cash and $10 in shares of CenturyLink common stock, representing an 11% premium over Savvis' closing stock price as of the close of trading on April 26, 2011 and a premium of 53% compared to Savvis' stock price at the beginning of the year.

At the closing of the transaction, CenturyLink will employ approximately 50,000 people based on the total number of CenturyLink and Savvis employees as of April 26, 2011.http://www.centurylink.com http://www.savvis.net

  • In 2004, Savvis acquired the assets of Cable & Wireless USA, which included 3,000 enterprise customers, 15 data centers, and significant consulting experience from Exodus Communications, a Tier 1 backbone.

  • In 2005, to reflect Savvis' expansion from network services to global IT services, the name was changed from Savvis Communications to Savvis, Inc.

  • In 2007, Savvis opened a new data center opened in Singapore.
  • In 2008, Savvis opened a new data center in London.
  • In 2010, Savvis acquired Canadian managed IT and colocation provider Fusepoint Inc. which included three data centers in Toronto, Vancouver and Montreal.

Recent Data
Center Consolidation Deals

April 2011

CenturyLink to Acquire SAVVIS

April 2011

Equinix Acquires ALOG Data Centers of Brazil

Feb 2011

Time Warner Cable Acquires NaviSite and its 10 Data Centers

Jan 2011

Verizon Acquires Terremark

Oct 2010

Neutral Tandem Acquires Tinet

Nov 2010

Windstream Acquires Hosted Solutions

June 2010

Cincinnati Bell Acquires CyrusOne Data Centers for $525 Million

May 2010

Equinix Acquires Switch and Data