Exhibit 99.1
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1025 Eldorado Boulevard
Broomfield, Colorado 80021
www.Level3.com
NEWS RELEASE
Level 3 contacts:
Media: Josh Howell Investors: Robin Grey
720-888-2517 720-888-2502
Jennifer Daumler Valerie Finberg
720-888-3356 720-888-2501
Level 3 to Acquire SAVVIS Content Delivery Network
Transaction Combines Industry Leading Network Scale
and Video Capabilities with Pioneering Content Distribution Capabilities
Company Will Be Well Positioned to Target Growth of
Rich Media Services over the Internet
BROOMFIELD, Colo., December 26, 2006 -- Level 3 Communications, Inc. (Nasdaq:
LVLT) today announced that it has signed a definitive agreement to acquire the
Content Delivery Network (CDN) services business of SAVVIS, Inc. (Nasdaq: SVVS).
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.
"The acquisition of SAVVIS's 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 O'Hara, president and chief operating officer of
Level 3. "We are looking forward to welcoming the pioneers of CDN to our team.
"The largest customers of CDN services rely on a combination of capabilities to
support their businesses. These include services like CDN, IP transit,
wavelengths, metro transport, and colocation. Upon completion of this
transaction, Level 3 believes that it will be the only CDN services provider
with a single source, full portfolio of end-to-end content distribution
solutions, and will be in a unique position to offer a range of building blocks
to meet these customers' needs.
"Level 3 already has a strong brand and capabilities in video distribution
through its Vyvx business. With native CDN capabilities and with Level 3's
highly scalable, industry-leading IP backbone, we believe that Level 3 will be
able to bring additional value to all video-centric companies by delivering
video in a more intelligent and comprehensive way to a broader range of
destinations.
"This acquisition does not require the type of physical integration associated
with the metro and backbone transactions we announced earlier this year. We are
confident in our ability to incorporate this key capability into our portfolio."
SAVVIS's content delivery customers include some of the largest enterprises in
the world, including Microsoft.
"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, general manager
of Global Foundation Services at Microsoft. "We look forward to a continued
relationship with Level 3 as they embark upon this next phase of their network
evolution."
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.
About Level 3 Communications
Level 3 Communications, Inc. (Nasdaq: LVLT), an international communications
company, operates one of the largest Internet backbones in the world. Through
its customers, Level 3 is the primary provider of Internet connectivity for
millions of broadband subscribers. The company provides a comprehensive suite of
services over its broadband fiber optic network including Internet Protocol (IP)
services, broadband transport and infrastructure services, colocation services,
voice services and voice over IP services. These services provide building
blocks that enable Level 3's customers to meet their growing demands for
advanced communications solutions. The company's Web address is www.Level3.com.
"Level 3 Communications," "Level 3" and the Level 3 Communications logo are
registered service marks of Level 3 Communications, Inc. in the United States
and/or other countries. Any other product and company names herein may be
trademarks of their respective owners. Level 3 services are provided by wholly
owned subsidiaries of Level 3 Communications, Inc.
Forward-Looking Statement
Some of the statements made by Level 3 in this press release are forward-looking
in nature. Actual results may differ materially from those projected in
forward-looking statements. Level 3 believes that its primary risk factors
include, but are not limited to: increasing the volume of traffic on Level 3's
network; developing new products and services that meet customer demands and
generate acceptable margins; successfully completing commercial testing of new
technology and information systems to support new products and services,
including voice transmission services; stabilizing or reducing the rate of price
compression on certain of our communications services; integrating strategic
acquisitions; attracting and retaining qualified management and other personnel;
and the ability to meet all of the terms and conditions of our debt obligations.
Additional information concerning these and other important factors can be found
within Level 3's filings with the Securities and Exchange Commission. Statements
in this release should be evaluated in light of these important factors.
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