US telecom company CenturyLink announced today it will acquire Savvis.
The global cloud computing enterprise, which also provides solutions for enterprises and government agencies, will sell for $40 (24) per share, adding up to a total of $2.5 billion.
With this acquisition, CenturyLink is expecting to become a major player in the global hosting and co-location market for businesses, on top of ramping up its revenues, as Glen F. Post III, chief executive (CEO) and president at CenturyLink, explained.
"We look forward to working with the Savvis team to leverage CenturyLink's significant scale and scope to fully realise the potential of Savvis' capabilities for our combined customers, while also enhancing value for our shareholders and providing opportunities for our employees," he said.
CenturyLink will be paying Savvis stockholders $30 per share in cash, plus $10 in shares of CenturyLink common stock. The price means a premium of 53 per cent in relation to Savvis' stock price at the beginning of the year.
"As migration to cloud-based services continues to accelerate rapidly, a strategic combination was a natural choice to create significant scale and become part of a large global network for the benefit of our customers, stockholders and employees," said James E. Ousley, chairman and CEO of Savvis.
"We believe that combining our proven capabilities in cloud infrastructure and managed hosting with CenturyLink's hosting assets and large base of business customers will create powerful opportunities to accelerate growth."
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