SYNNEX renewed its existing credit agreement and secured $1.8 billion in incremental financing, in connection with its proposed Convergys acquisition. Bank of America served as administrative agent on the transaction.
According to a related 8-K filing, the amended facility will increase the amount of incremental commitments for revolving loans or term loans SYNNEX can request for up to $500 million. The facility will also allow SYNNEX to assume Convergys’ indebtedness in respect of its outstanding convertible debentures and increase the maximum consolidated leverage ratio (as defined in the credit agreement) that SYNNEX is required to maintain from 4.00 to 1.00 to 4.25:1.00, but only from and after the first fiscal quarter ending after the closing of the Convergys acquisition.
“We appreciate the continued confidence shown in SYNNEX by our lenders, and their support in the expansion of our credit agreement at an overall financing cost that exceeded our expectations,” said Marshall Witt, chief financial officer of SYNNEX. “We are pleased with the successful completion of this credit facility, which increases our funding flexibility, enhances our ability to invest in growth, and further strengthens the execution of our capital allocation strategies.”
At the end of Q2 fiscal 2018, between cash and credit facilities, SYNNEX had over $1.9 billion of liquidity available to fund growth. SYNNEX anticipates similar liquidity levels and flexibility subsequent to the closing of the Convergys acquisition.
The acquisition is expected to close by the end of the 2018 calendar year, subject to the approval of shareholders of both companies, along with other regulatory requirements and customary conditions.
SYNNEX is a business process services company which provides a comprehensive range of distribution, logistics and integration services for the technology industry, along with outsourced services focused on customer engagement to a broad range of enterprises.
