Savvis Wins $200 Million Contract With MoneyLine, Predicts Breakeven

r

r

r

October 22, 2001 — (WEB HOST INDUSTRY REVIEW) — Savvis Communications Corp. (savvis.net), a global network
r

services provider, announced that it has secured a $200 million, five-year
r

agreement with MoneyLine Network, Inc. (moneyline.com) for networking
r

services.
r

r

Savvis also announced that it now projects that it will achieve breakeven
r

this quarter, sooner than its previous projection of the fourth quarter of
r

2002. Savvis will manage MoneyLine’s entire network, providing networking
r

services to the 6,000 client connections that MoneyLine has acquired from
r

Bridge Information Systems, including its Telerate business, and its
r

European and Asian businesses.
r

r

“In spite of a difficult environment for telecommunications sales, Savvis is
r

pleased to have now secured more than $500 million dollars in minimum
r

committed revenue for the next five years through its contracts with Reuters
r

and MoneyLine,” said Rob McCormick, chairman and CEO of Savvis. “Exclusive
r

of these two significant contracts, Savvis’ revenue grew 10% from Q1 to Q2,
r

far exceeding the sector growth rate of 2%. Savvis has succeeded in creating
r

a solid foundation for the future, based on both top and bottom line
r

performance.”
r

r

In August, MoneyLine had entered into an agreement for Savvis to provide a
r

minimum $122 million in services, and had announced its intent to begin
r

migrating off the Savvis network in the second year of the five-year
r

contract. The previous agreement also called for MoneyLine to purchase
r

Savvis’ switches and customer premises infrastructure. The new $200 million
r

agreement calls for MoneyLine to buy services according to the following
r

minimums: $70 million in year one, $50 million in year two, $35 million in
r

year three, $25 million in year four, and $20 million in year five. The new
r

agreement no longer includes the hardware purchase, since Savvis will manage
r

all network equipment and services over the full five-year term.
r

r

In addition to managing a satellite network that MoneyLine also uses, Savvis
r

will also manage, and eventually migrate, an additional 1,000 legacy
r

circuits for MoneyLine.
r

r

“MoneyLine’s decision to broaden its contract with us is a validation of our
r

business strategy and recognition of the global reach of our network into
r

the financial community,” said Jack Finlayson, president and chief operating
r

officer for Savvis. “Savvis appreciates the confidence that MoneyLine has
r

placed in us and looks forward to being their networking partner.”
r

r

Commenting on the financial impact, David Frear, chief financial officer of
r

Savvis, said, “In the past three quarters, Savvis has dramatically improved
r

its EBITDA performance from an EBITDA loss of$24M in Q2 to a projection of
r

breakeven in Q4.”

Leave a Comment