CenturyLink, the third largest telecom company in the US has confirmed on Wednesday, its decision to purchase the data centre services business Savvis.
CenturyLink is a Monroe, LA based voice and broadband service provider. It is primarily known for providing its services across the rural areas in the country.
With this acquisition of Savvis, a new chapter has been added to the ongoing cut-throat competition amongst telecom and cable companies to secure enterprise customers.
The deal reportedly cost CenturyLink approximately $2.5 billion. It has been also revealed that CenturyLink will offer Savvis shareholders $40 per share, almost 11 percent above the price registered during the market’s closing on Tuesday.
The main motive behind this recent acquisition is believed to be that CenturyLink is eying towards integrating its current hosting business with Savvis’ managed hosting and cloud services.
Expressing her view on the deal, Gartner’s research vice president, Lydia Leong said in a statement, "If CenturyLink is smart, Savvis gets largely left alone to continue what's been a pretty successful co-location, hosting and cloud infrastructure-as-a-service (IaaS) business."
This integrated unit will be headed by Savvis’s chairman and Chief Executive Officer, James Ousley.
It is important to note here that in the past year or two, CenturyLink has come up with a renovated, aggressive approach towards expanding its services, including the $10.6 billion purchase of the Qwest Communication last in April. The deal ended earlier in this month though.