Level 3 Communications Inc., an unprofitable phone and data-network operator, agreed to buy an Internet services business of Savvis Inc. for $135 million.
The Savvis unit, which is based in Thousand Oaks, California, brought in sales of about $15 million in the nine months ended Sept. 30, Broomfield, Colorado-based Level 3 said today in a statement.
The purchase is Level 3’s seventh in the past year. The company is increasing the services offered over its fiber-optic network. The purchase includes networking equipment, customer contracts and intellectual property. The Savvis unit manages Internet services, distributing print, music, film, videos and games for customers. Clients include Microsoft Corp.
Shares of Level 3 fell 6 cents to $5.60 at 1:02 p.m. New York time in Nasdaq Stock Market composite trading. They had almost doubled this year before today. Shares of Savvis, a supplier of Internet-based computing services located in Town & Country, Missouri, rose 92 cents, or 2.6 percent, to $36.84.
The all-cash acquisition should be completed during the first quarter of 2007, Level 3 said.
The Savvis unit employs about 50 workers. It has more than 100 customers and operates in more than 20 countries, the statement said. It was initially called Sandpiper Networks.
On Oct. 17, Level 3 agreed to buy Broadwing Corp. for $1.4 billion to add larger corporate clients and a 19,000-mile fiber- optic network.
