Level 3 Communications, Inc. has announced that it has signed a definitive agreement to acquire the Content Delivery Network services business of Savvis, Inc. Under the terms of the agreement, Level 3 will pay $135 million in cash consideration to acquire certain assets, including network elements, customer contracts, and intellectual property used in Savvis’s CDN business.
The purchase price is subject to certain customary post closing working capital adjustments.
Savvis’s CDN services business, based in Thousand Oaks, Calif., with approximately 50 employees and over 100 customers, provides solutions that improve performance, reliability, scalability and reach of customers’ online content. Initially developed in 1996 as Sandpiper Networks, the division developed, deployed and operated the world’s first content delivery network. It has a globally distributed infrastructure in more than 20 countries.
Savvis’s content delivery customers include some of the largest enterprises in the world, including Microsoft.
Savvis’s CDN business had approximately $15 million in revenue for the nine months ending September 30, 2006.
Closing is subject to customary conditions, including receipt of Hart-Scott-Rodino approval. Closing is expected to occur in the first quarter of 2007.