CenturyLink to buy Savvis for $2.5B

Deal will allow CenturyLink to offer Savvis' managed hosting services

CenturyLink has agreed to buy hosting company Savvis for about US$2.5 billion in cash and shares, the companies announced Wednesday.

The merger will allow CenturyLink to offer Savvis' managed hosting services to existing CenturyLink customers, the companies said.

The combined company will be led primarily by the Savvis leadership team, including its CEO Jim Ousley, CenturyLink said.

The deal will result in a hosting company with global reach, but more heavily dependent on U.S. business than Savvis already is. Savvis provides managed hosting and colocation and cloud services from 32 data centers in North America, Europe and Asia, while CenturyLink offers hosting services from a network of 16 data centers in the U.S.

Savvis obtained about 83 percent of its revenue from North American clients last year, with 13 percent from Europe, the Middle East and Africa, and 4 percent from Asia, according to a company presentation distributed Wednesday.

For the first quarter of 2011, Savvis reported a net loss of $1.8 million on revenue of $257 million, compared to a year-earlier loss of $11.3 million and revenue of $217 million. Revenue from network services, at $65.2 million, remained almost unchanged, but revenue from hosting services rose strongly to $191.8 million, the company said Wednesday.

CenturyLink plans to announce its first-quarter results on May 5. Last quarter, it reported reported net income of $232 million on revenue of $1.72 billion.

The company expects to close the deal in the second half of this year, and ultimately to make savings of $70 million a year by eliminating duplication between the two companies.

Peter Sayer covers open source software, European intellectual property legislation and general technology breaking news for IDG News Service. Send comments and news tips to Peter at peter_sayer@idg.com.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags business issuesservicesMergers / acquisitionsHostedsavvisCenturyLink

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Peter Sayer

IDG News Service
Show Comments

Cool Tech

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Breitling Superocean Heritage Chronographe 44

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?