Convergys Corp. sale wins shareholder approval

Synnex Corp. aims to close the deal on Oct. 5
Posted at 9:52 AM, Oct 04, 2018
and last updated 2018-10-04 09:52:28-04

CINCINNATI - Convergys employees will have a new boss by this weekend.

Synnex Corp. said it will complete its $2.8 billion acquisition of the Cincinnati-based call center company by Friday, after shareholders from both companies voted in favor of the deal yesterday.

San Diego, California-based Synnex will merge Convergys into its call-center subsidiary, Concentrix. The combined companies will have more than 225,000 employees on six continents, serving customers in more than 70 different languages.

“We are excited to welcome our talented colleagues from Convergys,” Synnex CEO Dennis Polk said in a press release. “This transformational combination reinforces Concentrix’ market position in business services, broadening our global scale and scope, and presents opportunities for revenue and profitability growth.”

Concentrix President Chris Caldwell told Wall Street analysts that Convergys will add $425 million in new revenue to Synnex in the last two months of this year. He expects the combined call centers to grow at about the industry average next year but climb above the industry norm after that.

“Since the announcement of the acquisition, we have been able to spend more time with clients and staff of Convergys, which has given us greater confidence that this transaction is the right move for Concentrix to further differentiate ourselves in the marketplace,” he said.

Synnex hasn’t been specific about job reductions that could follow the merger, but it has identified a cost-cutting goal of $150 million, half of that to be achieved in the next 12 months. In its third-quarter earnings call yesterday, Caldwell said that the actual savings could be more than $150 million.

“The Convergys team has been really outstanding at coming forward with ideas and what they can leverage from our infrastructure and what additional ideas we can leverage from theirs,” Caldwell said. “And that really gave us the confidence to come forward and say, 'Hey, we believe that we can increase this not only to $75 million in the first year, but also overachieve to $150 million over three years.'”

Caldwell told analysts in June there was surprisingly little overlap between the companies in clients and geographies. But he also said the company will save money by eliminating “duplicate infrastructure,” meaning call centers “where we’re literally across the street from each other.”

Convergys operates a call center in Erlanger, Ky. Concentrix has one in Hamilton. Convergys’ downtown headquarters has about 200 employees.

“We expect Convergys employees to gain expanded career opportunities as part of a larger organization with an enhanced industry-leading position,” Convergys spokeswoman Krista Boyle told WCPO in July. “Concentrix values our amazing team, and the work most people do today will need to be done tomorrow and long after.”