& cplSiteName &

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        ADD A COMMENT
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?

From The Founder
The independent evaluation of Nokia's key virtual network functions (VNFs) was a defining moment for the Finnish giant.
Flash Poll
Live Streaming Video
Prepping for the Future: Upskill U Explained
During this short kick-off video, Doug Webster, Vice President of Service Provider Marketing, Cisco, and Light Reading’s CEO & Founder Steve Saunders give an overview of Upskill U.
LRTV Documentaries
Light Reading Hall of Fame 2016

5|23|16   |   05:43   |   (1) comment


Find out who has been welcomed into Light Reading's Hall of Fame this year.
LRTV Custom TV
ZTE TM Forum Highlights

5|23|16   |     |   (0) comments


ZTE showcased its new ICT solutions at TM Forum in Nice.
LRTV Interviews
Gamma's MD on the Emergence of UC2

5|20|16   |     |   (0) comments


Gamma Communications Managing Director David Macfarlane believes the unified communications (UC) market has reached a tipping point.
LRTV Custom TV
The Ultimate 5-Minute Guide to Digital Customer Engagement

5|20|16   |     |   (0) comments


In this short video, you will hear all about how Digital Customer Engagement is the key to meeting customer expectations, keeping them happy, and maximizing revenue. VP Product & Marketing at Pontis, Ofer Razon, breaks down for us the five essential capabilities for successful Digital Customer Engagement. Don’t miss!
LRTV Custom TV
NFV in 2016: Part 1 – NFV Use Cases Get Real

5|19|16   |   05:57   |   (0) comments


Consensus is building around the key use cases for NFV, including managed IP services at the network edge and on customer premises, which can generate new revenues from enterprises/SMBs and consumers; Evolved Packet Core to support LTE migration; and adjacent technologies, such as TAS and IMS, to support VoLTE and next-generation charging and policy control ...
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 3

5|19|16   |     |   (0) comments


Steve Vogelsang discusses the challenges of operational transformation and how Nokia helps its customers. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Level 3: Why UC Is In Demand

5|17|16   |   04:12   |   (1) comment


Andrew Edison, Level 3's senior VP of sales, EMEA region, talks about the drivers of growth in the unified communications services market.
LRTV Custom TV
ARM's OPNFV Action

5|17|16   |     |   (0) comments


At the ARM booth at MWC 2016, Joe Kidder and Bob Monkman speak to Light Reading about OPNFV and their upcoming action.
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 2

5|16|16   |     |   (0) comments


Steve Vogelsang gives advice to service providers on how to move to NFV. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Interoute CTO on NFV's Maturity

5|13|16   |   06:46   |   (1) comment


Matt Finnie, CTO at international operator Interoute, explains how NFV has made life easier in terms of logistics and how Interoute can now enable a 'software-defined moment' for its customers.
LRTV Huawei Video Resource Center
UBBS 2016 Highlights

5|12|16   |     |   (0) comments


Highlights of Huawei's UBBS event in Hong Kong.
LRTV Huawei Video Resource Center
European 2020 Digital Agenda

5|12|16   |     |   (0) comments


Anacom's Fatima Barros discusses the plan to bring ultrafast broadband to Portugal by 2020.
Upcoming Live Events
May 24-25, 2016, Austin Convention Center, Austin, TX
September 13-14, 2016, The Curtis Hotel, Denver, CO
December 6-8, 2016,
June 16-18, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
Hot Topics
WiCipedia: Short Skirts & Back-Up Plans
Eryn Leavens, Special Features & Copy Editor, 5/20/2016
Nokia Plays It Smart With Major Mobile Devices Brand Deal
Iain Morris, News Editor, 5/18/2016
Ingenu Revs Up IoT Rhetoric
Iain Morris, News Editor, 5/18/2016
Intel Wants to Be a 5G Player
Dan Jones, Mobile Editor, 5/17/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
Animals with Phones
The Takeover Begins Click Here
It all started when Mittens taught himself how to use the Internet.
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.