SAVVIS Hones Strategic Focus with Sale of CDN Services Business to Level 3 Communications.
Focus on Core Hosting and Managed Network Services Continues, Including Data Center Expansion Announced Today
Outlook for 2007 Revenue of $815-835 Million and Adjusted EBITDA of $145-155 Million
ST. LOUIS -- SAVVIS, Inc. (NASDAQ:SVVS), a global leader in IT infrastructure services for business applications, today announced that it has entered into a definitive agreement to sell its content delivery network (CDN) services business to Level 3 Communications, Inc. (NASDAQ:LVLT) for $135 million in cash. Upon closing, the transaction is anticipated to result in net proceeds to SAVVIS of approximately $125-130 million after fees, expenses and taxes. The purchase price is subject to certain customary post closing working capital adjustments. The transaction is expected to close by the middle of the first quarter of 2007.
In March 2004, SAVVIS acquired substantially all of the assets of Cable & Wireless America, which consisted primarily of data centers, a Tier1 Internet backbone, a professional services practice and managed security business, and a content delivery network. Since then, SAVVIS has integrated the assets and grown into one of the leading providers of core IT infrastructure services focusing on hosting, data networks, data security, and data storage.
Phil Koen, SAVVIS' Chief Executive Officer said, "SAVVIS continues to hone its strategy of delivering IT infrastructure as a service, and our customers are responding favorably. We are selling our CDN services business with confidence that those customers will be best served by Level 3's commitment and focus as they integrate CDN as a strategic piece of their business portfolio. This sale, together with the planned opening of four new data centers also announced today, will enable us to serve customers better and grow our core hosting and managed network services, which include professional services and security services, while creating value for our stockholders."
2007 Outlook
Chief Financial Officer Jeff Von Deylen commented, "SAVVIS' core hosting and network services are helping change the way businesses manage information technology. We continue to sharpen our focus on these services as the drivers of our company's growth. Adjusted for the sale of the CDN services business and the expansion of our data-center footprint, we believe SAVVIS can achieve pro forma revenue growth of 10-13% and pro forma Adjusted EBITDA growth of approximately 30% or better in 2007."
