LONDON, UK / ACCESSWIRE / December 7, 2016 / Active Wall St. blog coverage looks at the headline from Synchronoss Technologies, Inc. (NASDAQ: SNCR) and Intralinks Holdings, Inc. (NYSE: IL) announced on December 06, 2016, that they have entered into a definitive agreement for Synchronoss to acquire Intralinks for $821 million in cash. In a parallel announcement Synchronoss also disclosed that it is divesting a major part of its carrier activation business to Sequential Technology International, LLC. Synchronoss is expected to realize $146 million from the sale of this business. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

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Synchronoss is a leading provider of cloud solutions which allow customers to connect, synchronize, and activate connected devices and services that empower enterprises and consumers to live in a connected world.

IntraLinks, which has Fortune 1000 companies as clients, provides confidential cloud-based software that enables companies to securely manage, control, track, search, exchange, and collaborate on sensitive information.

The acquisition of IntraLinks will give Synchronoss the necessary muscle to expand its scale and scope of operations. With the transformation in the business structure, Synchronoss will be able to take on the challenges and become a key player in the multi-billion dollar enterprise market.

Shedding light on the corporate move, Stephen Waldis, Synchronoss' CEO said:

"This acquisition marks another major step in the transformation of Synchronoss to significantly expand the scale and scope of the company's enterprise initiatives and strong carrier relationships in attacking this multibillion dollar market opportunity."

Ron Hovsepian, CEO of IntraLinks added:

"Together with Synchronoss, we believe we can deploy enhanced enterprise and mobile solutions to our customers while opening up new enterprise distribution channels across the world."

Highlights of the acquisition and divesture

Synchronoss will pay $13 per share in cash for each outstanding share of IntraLinks. The deal is expected to close by end of the first quarter of 2017 subject to regulatory approvals. Once the deal is finalized, the current CEO of Synchronoss, Stephen Waldis, will take on the role of Executive Chairman of the Board and will be responsible for the strategy, product innovation, and oversight in the new entity. Ron Hovsepian, CEO of IntraLinks is expected to be elevated to the role of CEO of Synchronoss and will also join the Board of Directors of the new company.

Synchronoss expects to realize around $40 million in combined synergies within the first year of finalization of the deal. Till the finalization of the acquisition, both companies will function independently.

Synchronoss plans to fund its acquisition of IntraLinks using a combination of cash in hand, funds realised from the divestment and an issue of fresh debt of $900 million.

Since the acquisition is expected to take place in Q1 2017, the deal will not impact Q4 2016 earnings results.

Synchronoss announced in apparel with the IntraLinks' acquisition, the divestment of a major chunk of its activation business to Sequential Technology International, LLC. As per terms of this deal, Sequential Technology will acquire 70% of the carrier activation business from Synchronoss for a consideration of $146 million. Synchronoss will continue to own the balance 30% and is looking at strategic alternatives for this portion. It plans to further reduce its stake in the activation business in 2017.

Post the finalization of the acquisition and the divestment in 2017, Synchronoss shared its earnings guidance for the new combined entity for 2017. The Company expects revenues for FY17 to be in the range of $810 million - $820 million and pro-forma EPS (earnings per share) in the range of $2.45 - $2.60.

Stock Performance

On Tuesday, the stock closed the trading session at $42.59, tumbling 13.08% from its previous closing price of $49.00. A total volume of 2.84 million shares have exchanged hands, which was higher than the 3-month average volume of 382.54 thousand shares. Synchronoss Technologies' stock price advanced 13.00% in the last month, and 17.39% in the previous six months. Furthermore, on a year to date basis, the stock gained 20.89%. The stock has a market capital of $1.93 billion.

Intralinks' share price finished yesterday's trading session at $13.12, surging 16.42%. A total volume of 3.81 million shares exchanged hands, which was higher than the 3 months average volume of 167.12 thousand shares. The stock has advanced 33.06% and 69.51% in the last three months and past six months, respectively. Furthermore, since the start of the year, shares of the company have skyrocketed 44.65%. The stock currently has a market cap of $743.51 million.

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SOURCE: Active Wall Street