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New Synnex CEO Confirms Convergys Acquisition

Synnex CEO Dennis Polk

The rumors were true. New Synnex CEO Dennis Polk has confirmed the distributor’s buyout of Convergys for $2.43 billion. Chatter about the potential deal had been swirling for much of this month.

Under terms of the deal, Convergys will integrate with Synnex subsidiary Concentrix  — which focuses on customer engagement and CRM/BPO services.

“This transaction accelerates Concentrix’ leadership position in the industry and creates a premier global customer engagement services company providing next generation customer experience and business improvements to market-leading brands,” Synnex said in a prepared statement.

Synnex expects the deal to generate $2.7 billion in revenue, and $380 million in adjusted EBITDA within the first year of owning Convergence. That means the deal was valued at roughly 6.4 times annual adjusted EBITDA, assuming the distributor hits expected cost-cutting targets (aka “synergies”) with the acquisition

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Although Synnex continues to compete aggressively in the traditional distribution market, Concentrix has allowed the company to successfully diversify the company’s revenue stream.

The company’s total revenues were $4.973 billion in fiscal Q2 ended May 31, 2018 — up 26.3 percent from Q2 last year, Synnex said today.

Acquiring Convergys is one of the first big moves for new Synnex CEO Dennis Polk. He succeeded longtime CEO Kevin Murai in January 2018. Polk has worked for the distributor and climbed the executive ranks since 2002.

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