Mar, 2002 : SAVVIS Secures $158 Million in Equity Funding

📅 March 14, 2002 - Global network services provider SAVVIS Communications Corp. (savvis.com) said today it had signed an agreement for equity funding of approximately $158 million.
SAVVIS said the funding would be used to reduce debt and other liabilities, and would provide additional working capital to bolster the company's customer base.
"Bucking the trend in our industry, we will have a robust balance sheet when this transaction is completed, with only a modest amount of remaining debt and funds to ramp up sales of our IP VPN, managed hosting and Internet services," said Rob McCormick, SAVVIS' CEO and chairman, in a release. "Unlike many of our competitors, SAVVIS is in strong financial health, and, from this position of strength, we are redoubling our commitment to drive revenue growth and continued margin improvement in 2002."
Under the agreement, SAVVIS will issue $158 million of 11.5 percent convertible preferred stock in exchange for cash and debt. SAVVIS said the transaction will reduce its debt by 64% to approximately $93 million.
The agreement will give equity investment firm Welsh, Carson, Anderson & Stowe approximately 56 percent of SAVVIS' voting stock.
"Our investment is an endorsement of SAVVIS' past performance, management's business plan going forward, and SAVVIS' strong, long-term prospects," said Thomas E. McInerney, general partner of Welsh, Carson, Anderson & Stowe, in a release. "SAVVIS has had impressive revenue growth in a contracting communications market and a slowing economy."
SAVVIS also said it had reached an agreement with GE Capital Vendor Financial Services to amend approximately $57 million of capital lease obligations.