Mergers & Acquisitions

Mergers & Acquisitions

July 19, 2011

CenturyLink Completes Acquisition of Savvis

CenturyLink, claiming to be the third largest telecommunications company in the United States, further strengthened its hold on its hosting and network capabilities by acquiring Savvis, Inc., which provides proven solutions in colocation, managed hosting and cloud services.

On completion of the merger, CenturyLink  prepaid approximately $546 million of Savvis' credit facility debt. Savvis stockholders are expected to receive $30 per share and 0.2479 of a share of CenturyLink common stock for each Savvis share held at the close of the transaction.

 In a press release Glen F. Post, III, CEO and president of CenturyLink believed that the combination would substantially enhance CenturyLink's capabilities and immediately provide the company with a solid platform for future growth.

The increased scale and financial strength of the combined company is expected to help deliver enhanced communications services to consumers and small businesses throughout the country. Century Link is well-positioned globally to address complex customer needs for outsourced IT and cloud service via its 190,000 route-mile fiber network.

Commenting on the merger, Post said, "The transaction helps us meet the accelerating demand for cloud-based services through a robust hosting presence, including 48 data centers in North America, Europe and Asia.”

The integration with Savvis' managed hosting and cloud services should increase CenturyLink's market share. The integrated services will be led by Savvis CEO, Jim Ousley, and other key members of the company's leadership team.

In addition, CenturyLink hopes to improve its revenue, EBITDA and free cash flow growth profile. It also expects to spend approximately $70 million in full run-rate annual operating costs and capital expenditure synergies.

In other news, CenturyLink acquired Qwest (News - Alert) Communications. The combined company will be able to deliver a broader range of communications services to consumers and small businesses throughout the company’s 37-state service area, and to business, wholesale and government customers nationwide via its 190,000 route-mile fiber network. 

Mini Swamy is a contributing editor for TMCnet. To read more of her articles, please visit her columnist page.

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