Concentrix Corporation (Nasdaq: CNXC), a leading global provider of
customer experience (CX) services and technologies, today announced
that they have reached a definitive agreement in which Concentrix
would acquire PK, a leading global CX design engineering company.
As part of the transaction, funds managed by Global Investment Firm
Carlyle (NASDAQ: CG) will sell its majority stake in PK, after
initially investing in the company in 2016. The transaction is
expected to close in Concentrix’ first fiscal quarter of 2022,
subject to regulatory requirements and other customary closing
conditions.
PK is a leading global CX digital design and engineering firm,
partnering with the world’s best brands to create pioneering
experiences that accelerate digital outcomes for their customers,
partners, and staff. With over 5,000 staff across 20 cities in four
countries, PK has been recognized and awarded worldwide for
designing and engineering digital experiences at scale.
This acquisition marks an evolutionary milestone for Concentrix,
supporting the growth strategy of investing in digital
transformation to deliver exceptional customer experiences. PK
gives Concentrix the ability to scale digital capabilities faster
while building excellence in key high growth areas of CX Design
& Development, AI, Intelligent Automation and Customer Loyalty.
With a complementary client base and similar vertical focus, PK
provides attractive opportunities within core and adjacent markets.
The combination of two leading providers uniquely brings together
the best of digital CX solutions and services.
Transaction Details:
- Investment of approximately $1.6 billion
- Expect PK to contribute approximately $530 million of revenue
and $85 million of adjusted EBITDA in the first full year following
the acquisition, reflecting 20% year-over-year growth for PK
- Transaction expected to be financed primarily through
additional bank debt borrowings under amended credit facility
- Net leverage expected to be 2.5x at close on a trailing
twelve-month pro forma basis. Concentrix expects to reduce net
leverage within the first twelve months after the transaction
closes
- Expect non-GAAP diluted earnings per common share accretion of
at least $0.50 in the first full year, with further accretion
expected in the second full year
“We are incredibly excited to welcome the PK team to Concentrix
and build the future of CX together,” said Chris Caldwell,
President and CEO of Concentrix. “This acquisition adds immediate
and meaningful breadth and scale to our CX digital capabilities. It
establishes a stronger presence in the complementary CX digital IT
services market, while enhancing our ability to continue to
increase our margins in high value services.”
“We take pride in helping our clients disrupt their markets and
Concentrix will allow us to continue to do that on a larger scale.”
said Dinesh Venugopal, CEO of PK. “Our vision has always been to
drive digital innovation and transformation focused on the customer
experience. Concentrix shares this vision, and we are excited to
join them as they mark another milestone in their ongoing story of
growth.”
Conference Call and Webcast:A conference call
will be held to discuss the acquisition this morning, Monday,
November 22, 2021, at 9:00 AM (ET) / 6:00 AM (PT), hosted by Chris
Caldwell, President and Chief Executive Officer and Andre
Valentine, Chief Financial Officer of Concentrix.
The live conference call will be webcast in listen-only mode in
the Investor Relations section of the Concentrix website under
“Events and Presentations”
at https://ir.concentrix.com/events-and-presentations.
A replay will also be available on the website following the
conference call.
About ConcentrixConcentrix Corporation (Nasdaq:
CNXC), is a leading global provider of customer experience (CX)
solutions and technology, improving business performance for some
of the world’s best brands including over 100 Fortune Global 500
clients and over 115 global disruptor clients. Every day, from more
than 40 countries and across 6 continents, our staff delivers next
generation customer experience and helps companies better connect
with their customers. We create better business outcomes and help
differentiate our clients through technology, design, data,
process, and people. Concentrix provides services to clients in our
key industry verticals: technology & consumer electronics;
retail, travel & ecommerce; banking, financial services &
insurance; healthcare; communications & media; automotive; and
energy & public sector. Visit www.concentrix.com to learn
more.
About PKPK is the experience engineering firm.
Together with the world's most customer-obsessed companies, we
combine great design and strong tech to build pioneering
experiences that accelerate outcomes
for clients' customers, partners, and employees. Through
cutting-edge technology and a commitment to deep craftsmanship, we
help our clients run the future. PK, which is backed by global
investment firm The Carlyle Group, is over 5,000+ people
strong in 22 cities across four countries. Learn more
at www.pkglobal.com
Use of Non-GAAP InformationWe refer to certain
non-GAAP financial measures in this press release, including:
- Non-GAAP diluted earnings per common share (“EPS”), which is
diluted EPS excluding the per share, tax effected impact of
acquisition-related and integration expenses, including related
restructuring costs, amortization of intangible assets and
share-based compensation.
- Adjusted earnings before interest, taxes, depreciation, and
amortization, or adjusted EBITDA, which is operating income,
adjusted to exclude acquisition-related and integration expenses,
including related restructuring costs, amortization of intangible
assets, and share-based compensation, plus depreciation.
We believe that providing this additional information is useful
to the reader to better assess and understand base operating
performance, especially when comparing results with previous
periods and for planning and forecasting in future periods,
primarily because management typically monitors the business
adjusted for these items in addition to GAAP results. As these
non-GAAP financial measures are not calculated in accordance with
GAAP, they may not necessarily be comparable to similarly titled
measures employed by other companies. These non-GAAP financial
measures should not be considered in isolation or as a substitute
for the comparable GAAP measures and should be used as a complement
to, and in conjunction with, data presented in accordance with
GAAP. A reconciliation of these forward-looking non-GAAP financial
measures to the most directly comparable GAAP financial measures is
not provided because we are unable to provide such reconciliation
without unreasonable effort, due to the uncertainty and inherent
difficulty of predicting the occurrence and the financial impact of
such items and the periods in which such items may be recognized.
For the same reasons, we are unable to address the probable
significance of the unavailable information, which could be
material to future results.
Safe Harbor This news release includes
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Forward-looking statements include, but are not
limited to, statements regarding the acquisition of PK, including
regulatory approvals and the satisfaction of other closing
conditions and the timing thereof, the estimated size of the
investment, the expected financing, the expected revenue and
adjusted EBITDA contributions of the PK business to the Company,
the expected growth of the PK business and the digital IT services
market, that the transaction is expected to be accretive and the
pace thereof, and the Company’s ability to scale its CX digital
capabilities and increase its margins, statements regarding the
Company’s expected future financial condition and results of
operations, including revenue, operating income, profit margins,
effective tax rate and leverage, and statements that include words
such as believe, expect, may, will, provide, could and should and
other similar expressions. These forward-looking statements are
inherently uncertain and involve substantial risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by such statements. Risks and
uncertainties include, among other things: risks relating to the
transaction, including that the transaction will not be
consummated; the ability to receive regulatory approval for the
transaction; the ability to obtain financing for the transaction on
a favorable basis if at all; the ability to retain key employees
and successfully integrate the PK business; diversion of
management’s attention; risks related to general economic
conditions, including uncertainty related to the COVID-19 pandemic
and its impact on the global economy; the level of outsourced
business services; the level of business activity of the Company’s
clients and the market acceptance and performance of their products
and services; consolidation of the Company’s competitors;
competitive conditions in the Company’s industry; currency exchange
rate fluctuations; variability in demand by the Company’s or PK’s
clients or the early termination of the Company’s or PK’s client
contracts; competition in the CX solutions industry; political and
economic stability in the countries in which the Company operates;
the outbreak of communicable disease or other public health crises;
cyberattacks on the Company’s networks and information technology
systems; the inability to protect personal and proprietary
information; increases in the cost of labor; the operability of the
Company’s communication services and information technology systems
and networks; changes in law, regulations or regulatory guidance;
investigative or legal actions; the loss of key personnel; natural
disasters, adverse weather conditions, terrorist attacks, work
stoppages or other business disruptions; and other factors
contained in the Company’s Annual Report on Form 10-K for the
fiscal year ended November 30, 2020 filed with the Securities and
Exchange Commission and subsequent SEC filings. The Company does
not undertake a duty to update forward-looking statements, which
speak only as of the date on which they are made.
Copyright 2021 Concentrix Corporation All
rights reserved. Concentrix, the Concentrix logo, and all other
Concentrix company, product and services names and slogans are
trademarks or registered trademarks of Concentrix Corporation and
its subsidiaries. Concentrix and the Concentrix logo Reg. U.S. Pat.
& Tm. Off. and applicable non-U.S. jurisdictions. Other names
and marks are the property of their respective owners.
Investor Contact:
David Stein
Investor Relations
Concentrix Corporation
david.stein@concentrix.com
(513) 703-9306
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