Synnex to acquire Convergys for $2.43 billion, stock falls after earnings
Synnex Corp. confirmed Thursday afternoon that it has agreed to acquire Convergys Corp. for $26.50 a share split evenly between cash and stock, a price that values the call-center company at approximately $2.43 billion. The deal, which The Wall Street Journal reported was in the works just before markets closed Thursday, is expected to close by the end of the year and combine Convergys with Synnex's own call-center division, called Concentrix. Convergys shares jumped after the report of the acquisition, closing with a 4.8% gain at $25.37. Synnex shares fell, though that was likely more the result of the company's earnings report, delivered earlier in after-hours time, and a weaker than expected profit forecast. Synnex reported net income of $93.7 million, or $2.34 a share, on revenue of $4.97 billion, up from $3.93 billion a year ago. After adjustments for amortization and other effects, Synnex claimed profit of $2.38 a share. Analysts on average expected adjusted earnings of $2.30 a share on sales of $4.67 billion, according to FactSet. While Synnex beat those expectations, it predicted adjusted earnings for the current quarter of $2.42 to $2.52 a share, and analysts on average were expecting $2.56 a share, according to FactSet. Synnex shares fell 4.2% in late trading, after closing with a 0.8% decline. The stock has dropped 21.5% so far this year, as the S&P 500 index has increased 1%.
