Funds affiliated with private equity firm Siris Capital (Siris) are to buy Synchronoss Technologies’ Intralinks Holding unit in a deal worth about USD1 billion.
As part of the deal, Siris will also make an investment in convertible preferred equity of Synchronoss in an amount of USD185 million. This investment would initially be convertible into approximately 19.8 per cent of Synchronoss’ common stock. The sale of Intralinks is expected to close in mid-November 2017; the sale of the preferred stock is expected to close in the first quarter of 2018. Both transactions are subject to closing conditions.
“As part of the review of strategic alternatives, the Board considered all elements of our businesses, and concluded that the best approach to maximising shareholder value is to concentrate on our core Comms & Media business,” says Stephen Waldis, Founder, Chairman and Chief Executive Officer of Synchronoss. “These transactions would provide Synchronoss with a strong balance sheet and the capital flexibility to pursue a more focused business strategy that builds on our existing footprint in Cloud, Messaging, and Digital Transformation while executing on key growth vectors in each of these areas. We believe that we will be well-positioned following this transaction to manage the predictable, mature business lines in Comms & Media and invest in the business for growth and expansion.”
Synchronoss remains committed to serving its leading communications and media customers globally, with an emphasis in its core markets in North America, Europe and an expanded presence in Asia. In particular, Japan continues to be a key market with a variety of near-term opportunities for the Company.
Waldis says: “We plan to use the proceeds from the Intralinks transaction to retire term loan debt and use the Siris USD185 million investment to drive future growth opportunities in the Company’s Communications and Media business.”
“We have tremendous confidence in the future of Synchronoss and look forward to working collaboratively with the company as it transitions back to its core focus of providing mission critical solutions to communications and media customers,” says Frank Baker, co-founder and managing partner of Siris. “We are also excited to acquire Intralinks and see it reemerge as an independent company focused exclusively on serving financial services and enterprise customers with virtual data room and highly-secure collaboration solutions.”
