Savvis leaps on Level 3 deal, inks Nortel pact
Savvis Communications Corp. (Nasdaq: SVVS) was vaulted up 17 percent on Island ECN before Wednesday's bell on news of a network services agreement with Level 3 Communications, Inc. (Nasdaq: LVLT).
Shares in the services provider, whose Financial Xchange platform connects to more than 4,700 financial institutions worldwide, were up 1.56 to 11.
Level 3 will provide Savvis with long-term transport and operation and maintenance services, as well as colocation space and network capacity, for a total of $135 million over a 20-year term.
Level 3 will provide Savvis with 20,000 miles of fiber in its North American intercity network and selected U.S. metropolitan networks
Savvis CEO Rob McCormick said the deal will enable his company to meet growing demand for its services, while ensuring superior reliability, scalability and bandwidth.
Over the next 42 months, Savvis has agreed to purchase Nortel Networks OPTera Optical Internet solutions -- to build a flexible, highly-reliable optical backbone connecting 50 U.S. and Canadian markets.
The company said that implementing Nortel's technology will allow it to increase network performance, scalability and flexibility, which translates into more differentiation and competitive advantages for customers.
Nortel will provide Savvis with professional services including program management and engineering and equipment installation.