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SVVS News SAVVIS Hones Strategic Focus with Sale of CDN Services Business to Level 3 Communications

ST. LOUIS--(BUSINESS WIRE)--SAVVIS, Inc. (NASDAQ:SVVS), a global leader in IT infrastructure services for business applications, today announced that it has entered into a definitive agreement to sell its content delivery network (CDN) services business to Level 3 Communications, Inc. (NASDAQ:LVLT) for $135 million in cash. Upon closing, the transaction is anticipated to result in net proceeds to SAVVIS of approximately $125-130 million after fees, expenses and taxes. The purchase price is subject to certain customary post closing working capital adjustments. The transaction is expected to close by the middle of the first quarter of 2007.

In March 2004, SAVVIS acquired substantially all of the assets of Cable & Wireless America, which consisted primarily of data centers, a Tier1 Internet backbone, a professional services practice and managed security business, and a content delivery network. Since then, SAVVIS has integrated the assets and grown into one of the leading providers of core IT infrastructure services focusing on hosting, data networks, data security, and data storage.

Phil Koen, SAVVIS' Chief Executive Officer said, “SAVVIS continues to hone its strategy of delivering IT infrastructure as a service, and our customers are responding favorably. We are selling our CDN services business with confidence that those customers will be best served by Level 3’s commitment and focus as they integrate CDN as a strategic piece of their business portfolio. This sale, together with the planned opening of four new data centers also announced today, will enable us to serve customers better and grow our core hosting and managed network services, which include professional services and security services, while creating value for our stockholders.”

2007 Outlook

Chief Financial Officer Jeff Von Deylen commented, “SAVVIS’ core hosting and network services are helping change the way businesses manage information technology. We continue to sharpen our focus on these services as the drivers of our company’s growth. Adjusted for the sale of the CDN services business and the expansion of our data-center footprint, we believe SAVVIS can achieve pro forma revenue growth of 10-13% and pro forma Adjusted EBITDA growth of approximately 30% or better in 2007.”

SAVVIS management’s current expectations for 2007 financial results include:

    --  Total revenue in a range of $815-835 million, including
        --  the impact of the anticipated decline of revenue from
            Reuters, SAVVIS' largest customer, to approximately $50-60
            million in 2007, and
        --  approximately $20 million of revenue impact from the sale
            of the CDN services business;
    --  Adjusted EBITDA in a range of $145-155 million, including
        --  approximately $6 million of negative Adjusted EBITDA
            impact for operating four new data centers, as detailed in
            SAVVIS' press release today, as operating expenses proceed
            customer revenues, and
        --  approximately $4 million of Adjusted EBITDA impact from
            the sale of the CDN services business; and
    --  Cash capital expenditures of $340-350 million, including
        $35-40 million for the network upgrade previously announced
        and approximately $200 million for the data center expansion
        announced today, with the remainder representing approximately
        70% ongoing success-based investments and 30% maintenance
        investments.

Funding for the data center expansion is expected to come from proceeds from the sale of the CDN services business, available cash, and available debt capacity.

Savvian Advisors LLC, the San Francisco-based investment bank, provided financial advice to SAVVIS in conjunction with the transaction.

* Adjusted EBITDA

“Adjusted EBITDA” represents income (loss) from operations before depreciation, amortization, accretion and non-cash equity-based compensation. We have included information concerning Adjusted EBITDA because we believe that in our industry such information is a relevant measurement of a company's operating financial performance and liquidity. The calculation of Adjusted EBITDA is not specified by United States generally accepted accounting principles. Our calculation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

Forward-Looking Statements

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from SAVVIS’ expectations. Certain factors that could adversely affect actual results are set forth as risk factors described in SAVVIS’ SEC reports and filings, including its annual report on Form 10-K for the year ended December 31, 2005, and all subsequent filings. Those risk factors include, but are not limited to, the risk that the transaction will not close, the risk that the financial results projected for 2007 will be materially different from those set forth in this release, variability in pricing for SAVVIS’ products, highly competitive markets, rapid evolution of technology, variability in the availability and terms of financing, uncertainties related to merger and acquisition activity, changes in our operating environment, and changes in regulatory environments. The forward-looking statements contained in this document speak only as of the date of publication, December 26, 2006. Subsequent events and developments may cause the company’s forward-looking statements to change, and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.

About SAVVIS

SAVVIS, Inc. (NASDAQ: SVVS) is a global leader in IT infrastructure services for business applications. With an IT services platform spanning North America, Europe, and Asia, SAVVIS leads the industry in delivering secure, reliable, and scalable hosting, network, and application services. These solutions enable customers to focus on their core business while SAVVIS ensures the quality of their IT systems and operations. SAVVIS’ strategic approach combines virtualization technology, a global network and 25 data centers, and automated management and provisioning systems. For more information about SAVVIS, visit www.savvis.net.