IBM exits customer care services business

IBM has exited from the customer care services business by selling to Synnex for $505 million.

BPO major Synnex will combine IBM's customer care service business with its subsidiary called Concentrix. The acquisition is expected to create a compelling value proposition for its clients.

The $505 million transaction will include approximately $430 million in cash and $75 million in Synnex stock.

The transaction is expected to add an estimated $120 million in earnings before interest, taxes, depreciation and amortization (EBITDA) and approximately $0.55 in fully diluted earnings per share (EPS) excluding one-time charges and integration costs in the first 12 months post the closing of the transaction.

The $405 million purchase price premium includes an estimated 40-50 percent in intangible assets which will be amortized over two to ten years.

"This acquisition will make Concentrix a global top 10 player in a growing market," said Kevin Murai, president and CEO of Synnex.

As part of the acquisition, Synnex will enter into a multi-year agreement with IBM in which Concentrix will become an IBM preferred business partner for customer care BPO outsourcing services, providing an extended ecosystem and delivery engine for Concentrix' and IBM's extended partners and solution providers.

"The new CRM BPO business will leverage the combined deep expertise, scale, process innovation and investments in high value industry platforms and assets to provide the customer experience and service innovation you have come to expect from IBM," said Lori Steele, general manager, IBM Global Process Services.

Once the transaction is complete, Concentrix will have approximately 45,000 employees servicing over 300 clients in over 40 languages through over 50 delivery centers on six continents.