SAVVIS Closes On Funding And Commences Management Of Cable - Wireless America Assets

Company Announces Financing Increased to $200 million and Funding of $52 Million Sale-Leaseback Oak Hill Special Opportunities Fund Provides Additional Capital

HostReview.com
Tuesday, February 17, 2004; 12:00 AM

ST. LOUIS, MO – February 17, 2004 – SAVVIS Communications Corporation (NASDAQ: SVVS), a leading global managed IP and hosting services provider, today announced that it has closed on subordinated debt financing of $200 million, and a sale lease-back of properties with DuPont Fabros for an additional $52 million, which it will use to acquire and operate the assets of Cable & Wireless USA, Inc. and Cable & Wireless Internet Services, Inc. (together with certain of their subsidiaries, “Cable & Wireless America” or “CWA”). SAVVIS stated that it has placed $150 million of the proceeds from these financings, representing the purchase price less the previously delivered deposit, into escrow and undertaken management of CWA assets pending final regulatory approvals. SAVVIS expects to obtain these approvals and complete the asset purchase transaction in early March.

“The $252 million in funding we have arranged provides SAVVIS with approximately $100 million in working capital to successfully integrate the companies and continue to provide outstanding service to the CWA customer base,” said Rob McCormick, Chairman and Chief Executive Officer of SAVVIS. “SAVVIS is also very excited about adding Oak Hill Special Opportunities Fund and DuPont Fabros to our financing group, further demonstrating continued support of SAVVIS’ virtualized utility platform, which is delivering high value managed services with industry leading reliability.”

As previously announced, SAVVIS submitted the winning bid on January 22, 2004 at an auction for the assets of CWA, wholly-owned subsidiaries of Cable and Wireless plc (NYSE: CWP; LSE: CW), after CWA filed for protection under Chapter 11 of the U.S. Bankruptcy Code in December of 2003.

Terms of Financing

The funding consists of a $200 million debt financing from existing shareholders Welsh, Carson, Anderson & Stowe (“WCAS”) and Constellation Ventures (“Constellation”), a Bear Stearns asset management fund, now joined by a group led by Oak Hill Special Opportunities Fund (“Oak Hill” and, with WCAS and Constellation, the “Financing Parties”), and the sale-leaseback of five CWA properties for $52 million. The Financing Parties provided subordinated debt (the “Notes”), which mature five years from the date of initial funding and are subject to redemption by SAVVIS during the first 360 days after the initial funding in an amount equal to the Notes’ accreted value. During this 360 day period, the Notes will bear interest at 12.5%, payable semi-annually in kind. After this period, interest will increase to 15%, payable semi-annually in kind. The Notes are redeemable at 101% after the fourth anniversary of the initial funding. In conjunction with this financing, SAVVIS has issued warrants to the Financing Parties to purchase participating preferred shares that will be automatically converted to approximately 129.4 million shares of SAVVIS common stock, at $1.63 per-common share, upon receipt of SAVVIS shareholder approval. The Financing Parties have exercised the warrants.

Pursuant to the sale-leaseback transaction with DuPont Fabros, SAVVIS has sold its rights to acquire four of the CWA data centers and one office facility for $52 million, and will leaseback those facilities for 15 years. With the consummation of the issuance of the Notes and the sale-leaseback transaction, SAVVIS has secured over $252 million in new cash to finance CWA related acquisition activities, including funding ongoing capital expenditures and working capital needs associated with the newly acquired assets. .

“We believe SAVVIS’ business model and value added services will enable it to continue to excel in the evolving telecommunications industry,” said Glenn R. August, Managing Partner of Oak Hill Special Opportunities Fund. “The addition of the Cable & Wireless network and hosting assets drives SAVVIS to an even larger scale and establishes it as a leading provider of managed IP communications and computing services. We are pleased to enter into this transaction with SAVVIS.”

The Cable & Wireless America assets SAVVIS is acquiring feature a Tier 1 IP network, 15 data centers, comprehensive consulting services, and a substantial Fortune 500 customer base. The acquired assets will add over 3,000 customers and the combined entity is currently projected to have annualized revenues of approximately $700 million by year-end 2004. The company currently projects that substantial infrastructure and operating synergies could be generated by this acquisition through the optimization of the combined network and hosting operations and the elimination of duplicate staff functions.

About SAVVIS
SAVVIS Communications (NASDAQ: SVVS) is a leading Managed Services Provider that delivers private IP VPNs (virtual private networks), hosting, IP voice and application services to businesses. SAVVIS solutions are designed for industries with demanding IP requirements, including legal, media, retail, professional services, healthcare, manufacturing, and financial services. With its recent acquisition of the commercial business of WAM!NET, the company now delivers fully managed media services that enable organizations to share, collaborate, store and manage content with their partners and clients, and accelerate their workflows in the process.

SAVVIS was ranked #3 in IP VPN market share by IDC in its 2003 report, trailing only AT&T and MCI. Known as The Network that Powers Wall StreetSM, its network reliability was declared “perfect” in Network World magazine’s groundbreaking study of backbone performance. In 2003, SAVVIS won the American Business Awards “Stevie”TM in the category of Best Customer Service Organization. SAVVIS’ managed hosting services were awarded the Service Provider Excellence Award by Boardwatch magazine for its virtualized approach to managed hosting, and the Market Engineering Award from Frost & Sullivan for product differentiation and innovation.

For more information about SAVVIS’ Intelligent IP NetworkSM and managed hosting solutions, visit: http://www.savvis.net. For information about WAM!NET visit: www.wamnet.com.

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 affect actual results are set forth as risk factors in SAVVIS’ SEC reports and filings, including its annual report on Form 10-K for the year ended December 31, 2002, as filed with the Securities and Exchange Commission on February 28, 2003, and all subsequent filings. SAVVIS assumes no obligation to update or supplement forward-looking statements.

INVESTOR CONTACT: Nancy Bridgman Lysinger V.P., Treasurer SAVVIS Communications (703) 234-8000 nancy.lysinger@savvis.net PRESS CONTACT Carter B. Cromley Director, Public Relations SAVVIS Communications (703) 234-8000 carter.cromley@savvis.net