Level 3 Communications Inc. is closing the year with another acquisition.
The company said Tuesday it will acquire the content delivery network (CDN) services business of SAVVIS Inc. for $135 million in cash. It is the latest in a line of purchases Level 3 made this year, including Broadwing Corp. for $1.4 billion in October.
SAVVISs CDN services business is based in Thousand Oaks, Calif., and has approximately 50 employees and more than 100 customers, including Microsoft Corp. It has infrastructure in more than 20 countries.
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 CEO of Level 3. 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.
SAVVISs CDN business had approximately $15 million in revenue for the nine months ending Sept. 30.
Level 3 Communications Inc. www.level3.com
SAVVIS Inc. www.savvis.net