Concentrix to acquire Webhelp in $4.8B transaction

Concentrix announced they have entered into an agreement to combine with Webhelp in a transaction valued at approximately $4.8B, including net debt. Webhelp specializes in CX, sales, marketing, and payment services with a client and delivery footprint in Europe, Latin America, and Africa. Chris Caldwell, president and CEO of Concentrix, will lead the combined organization. Concentrix has entered into a binding put option agreement to combine with Webhelp. Upon completion of customary works council consultations, the parties will enter into a definitive purchase agreement. Under the terms of the agreement, Concentrix will acquire 100% of the shares of Webhelp. Shareholders of Webhelp will receive 14.9M shares of Concentrix, EUR 500M of cash proceeds, and a EUR 700M note payable in two years, bearing an interest rate of 2%, with the right to earn an additional 0.75M shares of Concentrix if the Concentrix share price reaches $170.00 per share within seven years from the closing of the transaction. Additionally, Webhelp’s targeted net debt of approximately EUR 1.55B will be refinanced when the transaction closes. Upon closing of the transaction, Concentrix shareholders will own approximately 78% of the combined company with Webhelp shareholders owning approximately 22%. Maintaining its commitment to a diverse board of directors, the combined company will have a ten-member board, including two new board members that are expected to be Olivier Duha as Vice Chair of the Board and Nicolas Gheysens, as a representative of GBL. Cost synergy benefits are expected to be $75M in the first full year after closing, achieving a minimum of $120M, net of investments, by the third full year. At close, Concentrix is expected to have approximately $5.1B of total debt outstanding, consisting of newly issued senior notes, the EUR 700M note payable, and its existing credit and accounts receivable securitization facilities. Based on estimated pro forma adjusted EBITDA of approximately $1.6B in 2023 and expected net debt of approximately $4.9B at close, net debt-to-adjusted EBITDA is expected to be approximately 3x at transaction close and is expected to decrease to close to 2x within two years. Total transaction value of $4.8B and expected 2023 Webhelp revenue and adjusted EBITDA are based on an assumed exchange rate of 1.08 USD/EUR. The transaction value also reflects a Concentrix share price of $120.00 per share. The transaction is expected to close by the end of the year, subject to customary closing conditions, including approval by Concentrix shareholders and regulatory approvals. Certain shareholders of the company, including MiTAC International Corporation, which collectively owned approximately 15% of Concentrix common stock as of March 29, have agreed to vote their shares in favor of the transaction. Until the transaction is completed, the companies will continue to operate independently.