CenturyLink, Inc. said today that it has agreed to acquire Savvis, Inc.for $2.5 billion in cash and stock in a deal that will boost the telco’s capabilities in managed hosting and cloud computing. CenturyLink’s offer values Savvis (SVVS) at $40 a share, an 11 percent premium to Tuesday’s closing price of $36.02.
Here’s a roundup of notable analysis and commentary from around the web:
- Bloomberg – The purchase lets CenturyLink Chief Executive Officer Glen Post add so-called cloud-computing services as he seeks to offset declining home-phone demand and challenge larger rivals such as Verizon Communications Inc. (VZ) Verizon agreed in January to buy Savvis competitor Terremark Worldwide Inc. for $1.4 billion.
- GigaOm – Hot on the heels of finishing its acquisition of Qwest, CenturyLink plans to buy Savvis, the data center provider with operations around the United States. The $3.2 billion acquisition mirrors the $1.4 billion buy of Terremark that Verizon completed earlier this month as telecommunications providers buy their way into providing cloud computing and managed hosting services. This also moves CenturyLink from being an also-ran rural telecom provider to a player in the shifting telecom world.
- TechCrunch – Together, CenturyLink and Savvis say they will operate 48 data centers located in North America, Europe, and Asia with more than 1.9 million square feet of gross floor space, a national 207,000 route mile fiber network and a 190,000 mile global access network.
- Wall Street Journal – he deal pushes CenturyLink further into cloud computing, a hot area in the tech sector that enables access to computer services and data storage over the Internet. The industry has been booming since the recession because it allows businesses to reduce data costs and move content more nimbly. Forrester Research Inc. estimates the global market for cloud computing will grow from $40.7 billion in 2011 to more than $241 billion in 2020.
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