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Synchronoss Technologies share rising on US$1bn Siris Capital deal

Last updated: 08:54 17 Oct 2017 EDT, First published: 03:54 17 Oct 2017 EDT

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The US$1bn divestment is due to close next month

Synchronoss Technologies Inc (NASDAQ:SNCR) shares are set to start Tuesday higher as a strategic review concluded with a sale of a non-core subsidiary in a deal worth more than US$1bn.

The deal sees funds tied to Siris Capital Group acquire the Intralinks Holdings for US$1bn and it will also invest US$185mln in Synchronoss - via a subscription for convertible preferred equity which could equate to 19.8% of the company.

Proceeds from the Intralinks sale are anticipated by mid-November, while the equity subscription is expected to close in the first quarter of 2018.

Chief executive Stephen Waldis told investors that the company will be well-positioned to manage its communications and media business which is seen as more predictable and mature.

“As part of the review of strategic alternatives, the board considered all elements of our businesses, and concluded that the best approach to maximizing shareholder value is to concentrate on our core Comms & Media business,” Waldis said.

“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.”

He added: “We plan to use the proceeds from the Intralinks transaction to retire term loan debt and use the Siris $185 million investment to drive future growth opportunities in the company’s Communications and Media business.”

In premarket, Synchronoss shares were up US$1.44 or 10.49% to trade at US$15.17.

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