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December 2, 2020
The Synnex spinoff of its subsidiary Concentrix is complete. The distributor hatched the idea to create two separate publicly traded companies earlier this year.
Concentrix, a global business services company, reports approximately $4.7 billion in annual revenue. The company focuses on 10 vertical industries, including automotive, banking and financial services, consumer electronics, energy and public sector. It also covers health care services; insurance; media and communications; retail and e-commerce; technology; and travel, transportation and tourism.
Concentrix’s Chris Caldwell
“As a leading global provider of [customer experience] solutions and technology, we are truly excited to celebrate our listing day and start this next exciting chapter,” said Chris Caldwell, president and CEO of Concentrix. “Operating as an independent company will allow us to accelerate innovations and make additional investments that drive higher value for our clients, their customers and our shareholders.”
Synnex, a Fortune 200 company, founded in 1980, acquired Concentrix in 2006 for about $8 million. In 2013, Synnex acquired IBM’s worldwide customer care business process outsourcing (BPO) services business for $505 million. Then it integrated the IBM business with Concentrix. More recently, two years ago, Synnex acquired Convergys and also integrated it with Concentrix. [There were many other acquisitions by Synnex along the way].
During a January 2020 analyst call, Dennis Polk, president and CEO of Synnex, said the following:
Synnex’s Dennis Polk
“With the Convergys transaction one year ago, we expected it would be some time before we could consider a separation again due to the years and effort expected to successfully integrate Convergys into Concentrix, especially so given the size of the transaction. Also, we expect that it would take significant time to stabilize the business as Convergys was on a steady revenue decline path at the time of the acquisition.
“Well, as a result of the true entrepreneurial spirit and capability of Synnex and Concentrix, and under the excellent leadership of the management team, we substantially completed the integration and stabilized revenue growth in just one year, far ahead of expectations. This aspect, along with the dynamics of operating a nearly $5 billion a year, 225,000-plus associate CRM services entity under the umbrella of a technology distribution company, moved us to the belief that the two segments operating independently would be more beneficial for all stakeholders.
“Equally important in this decision is the fact that the markets that both businesses operate in, have been and will continue to go through rapid change. Considering this aspect, we believe that having each business be independent to address the individual market dynamics in the nimblest way will enable the best opportunity for each entity to grow and drive returns, especially so in the significant markets that each segment has to address.”
And with that said, the spinoff was underway.
While Synnex and Concentrix were always different and distinct types of businesses, with the separation complete, partners will see benefits. Synnex expects the spinoff will give each company a sharper strategic and managerial focus.
“We are pleased to announce the completion of the separation transaction and wish the Concentrix team well as an independently publicly traded company,” said Polk. “I am excited for the future of Synnex and the ongoing value we expect to deliver to our vendors, customers, associates and shareholders.”
Synnex stockholders, as of the close of business on Nov. 17, 2020, got one Concentrix common share for each share of Synnex common stock they held.
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