SAVVIS Announces Exchange of Preferred Stock for Common and 1-for-15 Stock Split

ST. LOUIS, MO — May 10, 2006 —SAVVIS, Inc. (NASDAQ:SVVS), a leading global provider of managed and outsourced IT services, today announced that holders of its Series A Preferred stock (“Preferred”) have agreed to exchange their Preferred for approximately 561 million shares of the company’s common stock. The company also announced that its Board of Directors has approved a 1-for-15 reverse stock split as authorized by stockholders. The reverse split is scheduled to take place on June 6, 2006. The exchange is anticipated to take place within six to eight weeks, subject to certain closing conditions.

SAVVIS Chief Executive Officer Phil Koen said, “Exchange of the Preferred by SAVVIS’ majority stockholders demonstrates their recognition of the significant progress the company has made over the past three years, and their confidence in SAVVIS’ future. We believe this simplification of our capital structure, combined with a reverse stock split, will appreciably increase the attractiveness of SAVVIS’ common stock. We look forward to building on this important event with continued successful growth of our company.”

The exchange consideration of 561 million shares includes 423 million shares accrued through March 31, 2006, and 139 million additional shares, representing approximately 58% of the shares Preferred holders were entitled to receive through the redemption date of March 2010. The Preferred accrues non-cash dividends at 11.5% per year and is convertible to common stock at a price of $0.75 per share. If the Preferred were not redeemed in March 2010, that dividend would increase to 20%. Total value of the outstanding Preferred as of March 31, 2006, was approximately $317 million, or the equivalent of 423 million shares of common stock.

SAVVIS had the option of redeeming the Preferred for cash in March 2010. Dividends through that date, as converted, would equal approximately 663 million shares of common stock, based on an accumulated value of $497 million, or an increase of approximately 240 million shares from March 31, 2006.

SAVVIS, Inc. Series A Preferred Stock Value


  dollar value,
as accumulated
common-share equivalent,
as converted
Feb. 2002 (issue date) $203 million 271 million
March 31, 2006 $317 million 423 million
June 30, 2006 $326 million 435 million
March 2010 (redemption date) $497 million 663 million
Exchange agreement $421 million 561 million

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. 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.

Jack Finlayson, President and COO of SAVVIS, said, “SAVVIS’ strong improvement in financial performance over the last three years will now be matched by an equally strong improvement in our capital structure. The creation of a single class of equity, and elimination of the dilution imposed by the Preferred dividend, benefits our customers, employees, and investors. Our financing partners have supported SAVVIS through difficult times in the early part of this decade, and are showing their support for a much stronger SAVVIS today with an early exit from the Preferred stock agreement.”

The Preferred stock was originally issued in March 2002 with a face value of approximately $203 million, and is convertible at the holders’ option to shares of common stock at a conversion price of $0.75 per share. SAVVIS had the option of redeeming shares for cash after March 2010; thereafter the dividend would increase to 20% for any unredeemed shares. SAVVIS also had the option of offering to buy the Preferred for two times its original face value at any time; had the holders declined such an offer, the dividend rate would readjust to 5% annually.

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.

SAVVIS’ Board of Directors has approved a 1-for-15 reverse stock split, under the discretionary authority it received at its Annual Meeting of Shareholders held April 25, 2006, to be effected June 6, 2006, for stockholders of record as of June 5, 2006. As a result of the reverse split, every fifteen shares of common stock will be combined into one share of common stock. Exchange of the Series A Preferred stock would bring SAVVIS’ total common stock issued and outstanding to approximately 749 million shares; following the reverse split, the company will have approximately 50 million shares of common stock issued and outstanding. The reverse stock split affects all of the company's common stock, restricted stock units, stock options and warrants outstanding.

The issuance of the shares in the exchange was approved by certain of the company’s stockholders by written consent for Nasdaq purposes. The written consent will become effective 20 days following the mailing of an information statement relating to the written consent. The information statement is subject to SEC review. The exchange of the Preferred stock is subject to certain conditions, including the effectiveness of the written consent, and may be postponed or terminated in the event the company enters into negotiations for its sale or merger.

Investor Conference Call
SAVVIS will webcast an investor conference call tomorrow, May 11, 2006, at 8:00 am EDT. Both the webcast and a supporting presentation will be available at on the Investor Relations page. A live conference call will also be available at +1 210-234-0021 and 800-857-0373 (in North America, toll free), with the password “SAVVIS NEWS.” Recorded replays will be available on the website, and by telephone at +1 203-369-0661 and 866-411-8823 (in North America, toll free) beginning at 11:00 am EDT tomorrow.

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, May 10, 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.

SAVVIS, Inc. (NASDAQ: SVVS) is a leading global provider of managed and outsourced IT services that focuses exclusively on IT solutions for businesses. 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

Elizabeth Corse
(703) 667-6984

Carter Cromley
(703) 667-6110

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