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October 22, 2001 — (WEB HOST INDUSTRY REVIEW) — Savvis Communications Corp. (savvis.net), a global network
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services provider, announced that it has secured a $200 million, five-year
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agreement with MoneyLine Network, Inc. (moneyline.com) for networking
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services.
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Savvis also announced that it now projects that it will achieve breakeven
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this quarter, sooner than its previous projection of the fourth quarter of
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2002. Savvis will manage MoneyLine’s entire network, providing networking
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services to the 6,000 client connections that MoneyLine has acquired from
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Bridge Information Systems, including its Telerate business, and its
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European and Asian businesses.
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“In spite of a difficult environment for telecommunications sales, Savvis is
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pleased to have now secured more than $500 million dollars in minimum
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committed revenue for the next five years through its contracts with Reuters
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and MoneyLine,” said Rob McCormick, chairman and CEO of Savvis. “Exclusive
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of these two significant contracts, Savvis’ revenue grew 10% from Q1 to Q2,
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far exceeding the sector growth rate of 2%. Savvis has succeeded in creating
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a solid foundation for the future, based on both top and bottom line
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performance.”
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In August, MoneyLine had entered into an agreement for Savvis to provide a
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minimum $122 million in services, and had announced its intent to begin
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migrating off the Savvis network in the second year of the five-year
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contract. The previous agreement also called for MoneyLine to purchase
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Savvis’ switches and customer premises infrastructure. The new $200 million
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agreement calls for MoneyLine to buy services according to the following
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minimums: $70 million in year one, $50 million in year two, $35 million in
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year three, $25 million in year four, and $20 million in year five. The new
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agreement no longer includes the hardware purchase, since Savvis will manage
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all network equipment and services over the full five-year term.
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In addition to managing a satellite network that MoneyLine also uses, Savvis
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will also manage, and eventually migrate, an additional 1,000 legacy
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circuits for MoneyLine.
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“MoneyLine’s decision to broaden its contract with us is a validation of our
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business strategy and recognition of the global reach of our network into
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the financial community,” said Jack Finlayson, president and chief operating
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officer for Savvis. “Savvis appreciates the confidence that MoneyLine has
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placed in us and looks forward to being their networking partner.”
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Commenting on the financial impact, David Frear, chief financial officer of
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Savvis, said, “In the past three quarters, Savvis has dramatically improved
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its EBITDA performance from an EBITDA loss of$24M in Q2 to a projection of
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breakeven in Q4.”
