Synnex to buy IBM’s customer care BPO services unit for $505m

The cash-stock deal will make Concentrix a top 10 provider in the $55+bn CRM BPO market.

New Statesman
Photograph: Getty Images.

Business process services provider Synnex Corporation has signed an agreement to acquire IBM’s global customer care business process outsourcing services (BPO) business for $505m to expand its geographic and industry reach.

The acquired business generated revenue of $1.3bn last year, which is more than 1 per cent of IBM’s overall revenue.

Synnex, which will pay a purchase price of about $430m in cash and $75m in common stock, will integrate the acquired business with its global business services division Concentrix Corporation.

The acquisition is expected to expand Concentrix’s global footprint across six continents to approximately 45,000 staff and 50 plus delivery centers.

Kevin Murai, president and CEO of Synnex, said: “This acquisition will significantly extend our portfolio of offerings and delivery capabilities that will make Concentrix a global Top 10 player in this growing market.”

The transaction is expected to add an estimated $120m in EBITDA and about $0.55 in fully diluted earnings per share (EPS) to Synnex, apart from enhancing its margin profile.

As part of the transaction, Concentrix will become an IBM strategic business partner for global customer care BPO services, under a multi-year agreement. 

Lori Steele, general manager of global process services at IBM, said: “This partnership between IBM and Synnex will provide our clients with the innovation they have come to expect from IBM through our deep capabilities in advanced analytics, social business, cloud and smarter commerce, complemented by Concentrix’ flexible and adaptive global customer care delivery network.” 

The transaction, which is subject to regulatory approvals, is expected to close in the next few months.