Savvis, After Denying Hiring Bankers, Inks $2.5 Bln Sale to CenturyLink

I hate it when companies fudge.

In March, I reported that Savvis was in talks to sell itself and that it had hired Qatalyst Partners. Well, I was apparently wrong about Qatalyst, but I was right about the sales talks. Today, Savvis announced that it has agreed to sell to CenturyLink for $2.5 billion. CenturyLink is also assuming about $700 million in debt.

Savvis’s sale has long been expected. In January, Verizon Communications announced its $1.4 billion takeover of Terremark Worldwide. Time Warner, five days later, then followed up with a $230 million deal for Navisite.

When I reported the story, Savvis denied hiring Qatalayst. Chief Executive Jim Ousley then told Dow Jones that Savvis had not hired an investment banker. The company, Ousley said, was more focused on exploring strategic partnerships overseas.

But Savvis, it appears, was looking to sell. Adam Shepard of Morgan Stanley advised Savvis on its sale to CenturyLink. Gordon Kroft, Barry Boniface, Joe Valenti and Ranjot Singh of Barclays Capital provided financial advice to CenturyLink.

According to BreakingViews, CenturyLink isn’t overpaying for Savvis. The offer values Savvis at 11 times this year’s EBITDA.