Light Reading
But will CenturyLink have to sweeten its $2.5B offer?

CenturyLink Clouds Up With Savvis Buy

Jeff Baumgartner
News Analysis
Jeff Baumgartner
4/27/2011
50%
50%

CenturyLink Inc. (NYSE: CTL) is the latest service provider to use M&A to shore up and accelerate its cloud networking strategy after putting up $2.5 billion for Savvis (Nasdaq: SVVS). But some analysts are already wondering if it will be enough to seal the deal.

CenturyLink said Wednesday it will acquire Savvis for $40 per share, or $2.5 billion, plus net debt of $700 million. Savvis shareholders are to receive $30 per share in cash and $10 per share of CenturyLink stock.

Although the deal represents an 11 percent premium over Savvis's closing price of $36.02 on April 26, there's speculation that CenturyLink may have to sweeten its offer.

"We would not be surprised if Savvis were to potentially receive a higher bid from another party, as traditional communication providers are looking for new avenues for revenue growth and are showing high interest in entering the managed hosting and cloud computing market," Mizuho Securities USA Inc. Analyst Michael Nelson said in a note issued this morning.

Of recent note, that kind of interest has led Time Warner Cable Inc. (NYSE: TWC) to buy NaviSite (Nasdaq: NAVI), and Verizon Communications Inc. (NYSE: VZ) to snap up Terremark.

Why this matters
Service providers and carriers are clearly racing to boost their cloud strategies and are looking to fill the gap with acquisitions rather than bridging it with something built from scratch. The deal should allow CenturyLink, which just wrapped up its Qwest Communications International Inc. (NYSE: Q) acquisition, to penetrate the cloud-computing and hosted-services market more deeply and rapidly than it could on its own.

As scale goes, a combined CenturyLink and Savvis will operate 48 data centers located in North America, Europe and Asia, a national 207,000 route-mile fiber network and a 190,000 mile global access network.

CenturyLink intends to integrate its hosting business with Savvis's and base the business unit in St. Louis, where it will be headed by Savvis CEO James Ousley.

For more
For more on the recent cloud computing M&A frenzy, check out:



— Jeff Baumgartner, Site Editor, Light Reading Cable

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Carol Wilson
50%
50%
Carol Wilson,
User Rank: Blogger
12/5/2012 | 5:06:38 PM
re: CenturyLink Clouds Up With Savvis Buy


Savvis is one of the early SaaS companies and has an established presence in cloud computing, so it makes sense that CenturyLink would target them. I'm wondering who the other bidders might be - AT&T, BT and Orange all have developed cloud services, but then so had Verizon before it bought Teremark.


For a peek at what Savvis has been doing, here's a link to a blog by Larry Steele, VP of SaaS at Savvis and a long-time cloud services proponent: http://blog.savvis.net/SaaS/.

Carol Wilson
50%
50%
Carol Wilson,
User Rank: Blogger
12/5/2012 | 5:06:34 PM
re: CenturyLink Clouds Up With Savvis Buy


The few sources I've spoken to on this don't think it's a sudden move by any means. The Level3/Global Crossing deal may have made this one more urgent but chances are CenturyLink has been working on thsi for a while but wanted to get the Qwest deal completed before moving.

scottdTBR
50%
50%
scottdTBR,
User Rank: Light Beer
12/5/2012 | 5:06:34 PM
re: CenturyLink Clouds Up With Savvis Buy


I wouldn't be surprised if Orange was involved in the bidding. This would go a long way towards their goal of 500M Euro in cloud revenue by 2015.


Any sense if this has been in the works for a while, or if the Level 3/Global Crossing deal had any impact on the decision?

Flash Poll
LRTV Custom TV
A New Security Paradigm in SDN/NFV

7|28|14   |   02:54   |   (0) comments


Paul Shaneck, Global Director Network Solutions for Symantec, discusses the evolving virtualized network, explaining how Symantec is leading the security discussion as it relates to SDN and NFV, and helping to ensure the network is protected and compliant.
LRTV Documentaries
Sprint's Network Evolution

7|24|14   |   14:59   |   (0) comments


Sprint's Jay Bluhm gives a keynote speech at the Big Telecom Event (BTE) about Sprint's network and services evolution strategy, including Spark.
LRTV Documentaries
BTE Keynote: The Software-Defined Operator

7|24|14   |   18:43   |   (1) comment


Deutsche Telekom's Axel Clauberg explains the concept of the software-defined operator to the Big Telecom Event (BTE) crowd.
Light Reedy
Numbers Are In: LR's 2014 Salary Survey

7|24|14   |   1:25   |   (7) comments


Our fourth annual Salary Survey paints a picture of who's hiring, firing, earning, and yearning for a change in the telecom industry.
LRTV Custom TV
Driving the Network Transformation

7|23|14   |   4:29   |   (0) comments


Intel's Sandra Rivera discusses network transformation and how Intel technologies, programs, and standards body efforts have helped the industry migration to SDN and NFV.
LRTV Custom TV
Distributed NFV-Based Business Services by RAD

7|18|14   |   5:38   |   (0) comments


With the ETSI-approved Distributed NFV PoC running in the background, RAD's CEO, Dror Bin, talks about why D-NFV makes compelling sense for service providers, and about the dollars and cents RAD is putting behind D-NFV.
LRTV Custom TV
MRV Accelerating Packet Optical Convergence

7|15|14   |   6:06   |   (0) comments


Giving you network insight to make your network smarter.
LRTV Custom TV
NFV-Enabled Ethernet for Generating New Revenues

7|15|14   |   5:49   |   (0) comments


Cyan's Planet Orchestrate allows service providers and their end-customers to activate software-based capabilities such as firewalls and encryption on top of existing Ethernet services in just minutes.
LRTV Custom TV
Symkloud NVF-Ready Video Transcoding, Big Data

7|9|14   |   3:41   |   (0) comments


Kontron and ISV partner Vantrix demonstrate high-performance video transcoding and data analytic solutions on same 2U standard platform that is ready for SDN and NFV deployments made by mobile, cable and cloud operators.
LRTV Huawei Video Resource Center
The Evolving Role of Hybrid Video for Competitive Success

7|4|14   |   4:09   |   (0) comments


At Huawei's Global Analysts Summit in Shenzhen, China, Steven C. Hawley from TV Strategies speaks to us about the evolving role of hybrid video for competitive success.
LRTV Huawei Video Resource Center
How CSPs Leverage Big Data in the Digital Economy

7|4|14   |   4:48   |   (2) comments


Justin van der Lande from Analysys Mason shares with us his views on how telecom operators can leverage customer asset monetization with big data. His discusses the current status of big data applications and the challenges and opportunities for telecom operators in the digital economy era.
LRTV Huawei Video Resource Center
Accelerator for Digital Business Future Oriented BSS

7|4|14   |   3:08   |   (0) comments


Mobile and internet are becoming intertwined; IT and CT are integrating; and leading CSPs have begun to transform to information service and entertainment providers. How should the BSS system evolve to enable this transformation? Karl Whitelock, an analyst at Frost & Sullivan, shares his views.
Upcoming Live Events!!
September 16, 2014, Santa Clara, CA
September 16, 2014, Santa Clara, CA
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
Packet Design asks network professionals how they handle the cloud, SDN, and network management.
Today's Cartoon
Vacation Special Caption Competition Click Here
Latest Comment
Hot Topics
Is Windstream Boldly Setting a New Trend?
Carol Wilson, Editor-at-large, 7/29/2014
U-verse Growth Slips But Still Strong
Alan Breznick, Cable/Video Practice Leader, 7/24/2014
Salary Survey Report 2014
Sarah Reedy, Senior Editor, 7/23/2014
Facebook: 30% of Users Are Mobile-Only
Mitch Wagner, West Coast Bureau Chief, Light Reading, 7/24/2014
Verizon Applies 3G Throttling Policy to LTE
Sarah Reedy, Senior Editor, 7/25/2014
Like Us on Facebook
Twitter Feed