CenturyLink, Inc, the Monroe, La.-based phone company that completed its acquisition of Denver-based Qwest a month ago, announced today it has acquired Savvis for $40 per share in a cash and stock transaction.
Savvis’ products and services include managed IT services, data hosting and colocation, and national data transport and connectivity. The acquisition provides “an immediate and significant platform” for CenturyLink to capture growth in managed hosting, cloud computing and colocation, the company said.
Under the terms of the transaction, Savvis stockholders will receive $30 per share in cash and $10 in shares of CenturtyLink common stock.
CenturyLink said with the addition of Savvis, CenturyLink will achieve a global presence as a managed hosting and colocation provider and will accelerate CenturyLink’s ability to deliver “quality managed hosting and cloud capabilities to its business customers.”
“The transaction creates a premier managed hosting and colocation provider with global scale in a high growth sector, and is expected to be accretive (expected to increase) revenue growth and cash flow per share,” said Glen F. Post III, CEO and president of CenturyLink.
Post added that businesses are shifting the way they manage their information technology services and infrastructure and the acquisition of Savvis helps CenturyLink meet those needs.
CenturyLink said the acquisition of Savvis is expected to improve CenturyLink’s revenue, earnings before interest, taxes and depreciation (EBITDA), and free cash flow growth profile.
CenturyLink expects to realize approximately $70 million in “full-run” annual operating cost and capital expenditure synergies, CenturyLink said.
CenturyLink’s acquisition of Denver-based Qwest has created an industrial giant which employs 47,500 and serves 15 million phone and 5 million broadband subscribers in 37 states.
Incorporated in 1968, CenturyLink at its core is a phone operator. It exploded in size and ventured into urban markets with the purchase of Kansas city-based Embarq in July 2009.Howard Pankratz: 303-954-1939 or hpankratz@denverpost.com.
