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Level 3 Communications has announced plans to purchase the Content Delivery Network services business of SAVVIS for $135 million in cash, a move meant to enable the company to provide more rich media services via the Web.
SAVVISs CDN business, which has approximately 50 employees, made about $15 million in revenue in 2006, as of Sept. 30. The deal is expected to close in the first quarter of 2007.
“The acquisition of SAVVISs CDN services business will enable Level 3 to better address the increasing opportunity presented by rich media applications such as video, Web 2.0 applications, multiplayer online gaming and software as a service over the Internet,” said Kevin OHara, president and chief operating officer of Level 3, in a statement. “We are looking forward to welcoming the pioneers of CDN to our team.
Level 3, an international communications company, provides a comprehensive suite of services over its broadband fiber optic network including Internet Protocol services, broadband transport and infrastructure services, collocation services and voice over IP services.
SAVVIS CDN services division, based in Thousand Oaks, Calif., provides solutions that improve performance, reliability, scalability and reach of customers online content. Its CDN customers include some of the largest enterprises in the world, including Microsoft, Level 3 officials said.
The acquisition will enable Level 3 to better serve video-centric customers by delivering video in a more intelligent and comprehensive way to a broader range of destinations, Level 3 officials said.
“As we grow our online services business, stability and control over our network infrastructure becomes increasingly important to deliver great experiences for our customers, partners and advertisers,” said Arne Josefsberg, Microsofts general manager of Global Foundation Services, in the same statement. “We look forward to a continued relationship with Level 3 as they embark upon this next phase of their network evolution.”