Concentrix Corporation entered into an agreement and a plan of merger to acquire Convergys Corporation (NYSE:CVG) for $2.4 billion on June 28, 2018. Convergys shareholders will receive $13.25 per share in cash and 0.11933 common shares of SYNNEX Corporation (NYSE:SNX), parent company of Concentrix, for each common share of Convergys subject to a two-way collar, the adjustment as provided in the Merger Agreement in the event that the trading price of SYNNEX common stock prior to the closing of the Mergers increases or decreases by more than 10% from a baseline price. The exchange ratio will vary from 0.1263 to 0.1141 comprising of 0.1193 depending upon the SYNNEX average closing price. At the effective time, each compensatory, in-the-money, option to purchase Convergys common share will receive the difference between the weighted average exercise price and the cash equivalent merger consideration which will be equal to the sum of $13.25 plus the product of the 0.11933 multiplied by SYNNEX closing price. At the effective time, each restricted stock unit award, each deferred stock unit award and performance- based restricted stock unit award will receive the same cash equivalent merger consideration.

The purchase price will be funded form existing cash and debt. SYNNEX has secured a $3.57 billion 364-day senior secured bridge term loan facility to fund the transaction. The bridge facility consists of a $1.8 billion tranche to finance the transaction and a $1.77 billion tranche to backstop an amendment of the company's existing secured credit agreement to permit the transaction related indebtedness. Upon closing, SYNNEX will integrate Convergys with its wholly-owned subsidiary, Concentrix, and thereby will no longer be listed on the NYSE. The name of the combined company will be Concentrix. If the transaction is terminated by after a meeting of the Convergys' shareholders in which the company shareholder approval was not obtained, Convergys shall be obligated to pay SYNNEX a fee equal to $12.35 million or after a meeting of SYNNEX' stockholders in which the SYNNEX stockholder approval was not obtained, SYNNEX shall be obligated to pay Convergys a fee equal to $12.35 million. The agreement may be terminated if the transaction is not consummated by December 28, 2018. In case of termination, Convergys will pay a termination fee of $74 million.

Chris Caldwell will remain President of Concentrix and will continue to report into Dennis Polk, Chief Executive Officer and President of SYNNEX. The new Executives from Convergys will report into Chris Caldwell. All other reporting relationships remain the same at this time. The transaction is subject to customary closing conditions including approval of shareholders of both Convergys and SYNNEX, receipt of regulatory and anti-trust approvals, effectiveness of registration statement and listing approval of new shares. The transaction has been unanimously approved by the Boards of Directors of Convergys and SYNNEX. In connection with the Merger Agreement, Convergys' Chief Executive Officer, Chief Financial Officer and all of the Directors, each in his or her capacity as a shareholder (together the “Voting Shareholders”), have entered into a voting agreement, dated as of June 28, 2018 and have agreed to vote all of their Common Shares in favor of the adoption of the Merger Agreement. As of July 30, 2018, early termination notice of Federal Trade Commission has been granted.

The European Commission was approached for approval on September 7, 2018. European Commission is expected to decide on the deal by October 12, 2018. As of October 3, 2018, The European Commission approved the deal. Both SYNNEX and Convergys have set their shareholder vote meetings for October 3, 2018, and SYNNEX expects to obtain all required regulatory approvals and to close the transaction shortly after the shareholder meetings. As of October 3, 2018, the transaction received all regulatory approvals and shareholders approvals of SYNNEX and Convergys. The transaction is expected to close by the end of the 2018 calendar year. As of September 13, 2018, SYNNEX announced that the acquisition of Convergys is expected to close earlier than anticipated. As of October 3, 2018, the deal is expected to close on October 5, 2018. The transaction is expected to result in non-GAAP EPS accretion of mid-single digits in the first year, reaching double-digits by the second year and cost synergies of $50 million in the first year, achieving a minimum of $150 million by the third year along with debt to adjusted EBITDA of approximately 3.5x leverage at closing, and expected return to historical levels of 2.5x or less within 18-24 months.

Centerview Partners acted as financial advisor and will receive a fee of $46 million and Daniel A. Neff and DongJu Song of Wachtell, Lipton, Rosen & Katz acted as legal advisors to Convergys. Merrill Lynch, Pierce, Fenner & Smith Incorporated acted as financial advisor and will receive a fee of $3.25 million and Allison Leopold Tilley, Christina F. Pearson, Stan Wong, Gabriella Lombardi, Julie Park, Omar Bailony, Philip Tendler, Andrew Taggart, Mike Sibarium, Jeetander Dulani, Evan Storm, Mark Jones, Howard Clemons, and Nora Burke of Pillsbury Winthrop Shaw Pittman LLP acted as legal advisors to SYNNEX. Jinsoo H. Kim, Jeong M. Lee, David Hahn, Scott G. Johnsson, Alan F. Denenberg and Ali Degolia of Davis Polk is advising the joint lead arrangers and book runners for a $3.57 billion 364-day senior secured bridge term loan facility provided to SYNNEX Corporation in connection with the transaction. Innisfree M&A Inc. acted as information agent to Convergys with a fee of $0.03 million.

Concentrix Corporation completed the acquisition of Convergys Corporation (NYSE:CVG) on October 5, 2018.