One of the leading integrated telecommunications service
providers,
CenturyLink, Inc.
(
CTL
) through its subsidiary Savvis Inc. is buying assets of
Ciber, Inc.
's (
CBR
) information technology outsourcing (ITO) business.
Based in Greenwood Village, Colorado, Ciber is a global company
engaged in information technology business consulting, and
outsourcing services across 19 countries covering North America,
Europe and Asia.
According to the deal terms, CenturyLink will pay $7 million to
buy ITO assets from Ciber that include infrastructure, technology
and facilities across several countries. The business deal is
expected to close during the fourth quarter of the year, pending
regulatory approvals.
The proposed acquisition is expected to aid Savvis' existing ITO
business by expanding its global reach as well as enhancing
capabilities in cloud services and customer support. Savvis also
plans to hire 750 Ciber employees.
The proposed agreement follows the existing partnership between
Ciber and Savvis formed in 2011 that allowed Ciber to benefit from
Savvis' physical infrastructure of over 50 data centers and network
build-outs. Ciber will continue to serve its clients with
application development and outsourcing services, including system
design, implementation and managed services supported by Savvis
infrastructural facilities.
With the acquisition of Savvis, CenturyLink forayed into the
cloud computing business, which is growing by leaps and bounds. The
acquisition strengthened CenturyLink's footprint in the hosting
managed cloud services business with data centers in North America,
Europe and Asia.
The company continues to expand data centers this year with a
view to generate higher revenue growth in managed hosting and cloud
services. These acquisitions bequeathed several additional benefits
along with greater scale and operational efficiencies, providing
the company with a competitive edge over market giants like
AT&T, Inc.
(
T
) and
Verizon Communications Inc.
(
VZ
).
We maintain our long-term Neutral recommendation on CenturyLink
Inc. The stock also has a Zacks #3 Rank, implying a short-term Hold
rating.
CIBER INC (CBR): Free Stock Analysis Report
CENTURYLINK INC (CTL): Free Stock Analysis
Report
AT&T INC (T): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
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