US fixed-line operator CenturyLink has agreed to buy IT infrastructure services specialist Savvis for USD 40 per share or a total USD 2.5 billion, plus net debt of approximately USD 0.7 billion. Savvis stockholders will receive USD 30 per share in cash and USD 10 in shares of CenturyLink common stock, subject to adjustment. The consideration represents an 11 percent premium over Savvis' closing stock price as of the close of trading on 26 April and a premium of 53 percent compared to Savvis' stock price at the beginning of the year. The combination of CenturyLink's hosting and network assets with Savvis' services in colocation, managed hosting and cloud services enhances CenturyLink's portfolio. CenturyLink and Savvis will operate 48 data centres located in North America, Europe, and Asia with over 1.9 million square feet of gross floor space, a national 207,000 route mile fibre network, and a 190,000 mile global access network. The acquisition is expected to improve CenturyLink's revenue, EBITDA and free cash flow. CenturyLink expects to realise approximately USD 70 million in full run-rate annual operating cost and capital expenditure synergies. The transaction is expected to be accretive to CenturyLink's free cash flow per share, excluding integration costs, in the first full year following the close. CenturyLink anticipates integrating its hosting business and Savvis' managed hosting and cloud services into a single CenturyLink business unit. This integrated hosting business will be based in St. Louis, Missouri and led primarily by key members of the Savvis leadership team, including Savvis CEO James Ousley, who will head the unit. Following the closing of the transaction, CenturyLink will employ approximately 50,000 people based on the total number of CenturyLink and Savvis employees as of 26 April.
