SAVVIS Completes Exchange of Preferred Stock for Common; 37.4 Million Shares of Common Stock Issued to Simplify Capital Structu
30 Juni 2006 - 2:30PM
Business Wire
SAVVIS, Inc. (NASDAQ:SVVSD), a global leader in IT infrastructure
services for business applications, today announced the completion
of the exchange of its Series A Preferred stock ("Preferred") for
approximately 37.4 million shares of the company's common stock, in
keeping with the company's announcement of May 10, 2006. Following
the exchange, SAVVIS will have approximately 50.5 million shares of
common stock outstanding. SAVVIS Chief Executive Officer Phil Koen
said, "The exchange of the Preferred is an important event for
SAVVIS and our stockholders, eliminating significant common-stock
dilution and over $40 million of annual non-cash dividend charges
from our income statement. Further, the decision demonstrates
recognition of SAVVIS' past accomplishments and confidence in our
future prospects by our majority stockholders. This improvement in
our capital structure, combined with successful execution against
targets for growth and margin improvement, delivers on our
commitment to creating value for all of our stockholders." The
exchange consideration of 37.4 million shares includes 29.0 million
shares accrued through June 30, 2006, and 8.4 million additional
shares, representing approximately 55% of the shares Preferred
holders were entitled to receive through the redemption date of
March 2010. The Preferred accrued non-cash dividends at 11.5% per
year and was convertible to common stock at a price of $11.25 per
share. If the Preferred were not redeemed in March 2010, the
non-cash dividend would have increased to 20%. Total value of the
outstanding Preferred as of June 30, 2006, was approximately $326
million, or the equivalent of 29.0 million shares of common stock.
Sale of the newly-issued common stock in the open market will be
prohibited through November 1, 2006, for holders of approximately
99% of the issued stock, unless approved by the Special Committee
of the Board of Directors. Following that, investors may trade the
securities in accordance with all applicable securities laws,
including insider-trading rules. The investors have demand and
piggy-back registration rights, subject to certain restrictions.
Welsh, Carson, Anderson & Stowe and certain affiliates will
remain SAVVIS' controlling stockholder, with approximately 59% of
outstanding shares following the exchange. SAVVIS formed a Special
Committee of its Board in October 2005, comprised of the
independent Board members and advised by independent outside
counsel, to negotiate with the Preferred holders. The Special
Committee has approved the exchange offer. In addition, SAVVIS
received an independent fairness opinion before finalizing the
agreement. Additional information regarding the Preferred and the
exchange agreement is available through SAVVIS' information
statement filed with the U.S. Securities and Exchange Commission on
June 9, 2006, and mailed to all stockholders on that date and
through SAVVIS' press release of May 10, 2006. Forward-Looking
Statements This document contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Actual results may differ materially from SAVVIS'
expectations. Certain factors that could adversely affect actual
results are set forth as risk factors described in SAVVIS' SEC
reports and filings, including its annual report on Form 10-K for
the year ended December 31, 2005, and all subsequent filings. Those
risk factors include, but are not limited to, variability in the
availability and terms of financing, uncertainties related to
merger and acquisition activity, volatility in securities markets,
changes in our operating environment, and changes in regulatory
environments. The forward-looking statements contained in this
document speak only as of the date of publication, June 30, 2006.
Subsequent events and developments may cause the company's
forward-looking statements to change, and the company will not
undertake efforts to revise those forward-looking statements to
reflect events after this date. About SAVVIS SAVVIS, Inc.
(NASDAQ:SVVSD) is a global leader in IT infrastructure services for
business applications. With an IT services platform spanning North
America, Europe, and Asia, SAVVIS has over 5,000 enterprise
customers and leads the industry in delivering secure, reliable,
and scalable hosting, network, and application services. These
solutions enable customers to focus on their core business while
SAVVIS ensures the quality of their IT systems and operations.
SAVVIS' strategic approach combines virtualization technology, a
global network and 25 data centers, and automated management and
provisioning systems. For more information about SAVVIS, visit
www.savvis.net.
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