Synchronoss Technologies (SNCR) is up sharply today (+20%) on positive commentary from management in terms of its strategic alternative review process. In terms of quick background, SNCR provides software for the mobile transformation of business.
Its portfolio, which is targeted at the Consumer and Enterprise markets, contains offerings such as personal cloud, secure-mobility, identity management and scalable messaging platforms. These technologies create a better way of delivering mobile experiences that service providers and enterprises need. SNCR's products and platforms are designed to be carrier-grade, flexible and scalable, enabling multiple converged communication services to be managed across a range of distribution channels including e-commerce, m-commerce, telesales, customer stores, indirect and other retail outlets.
So a little history would help. SNCR had seen its stock price decline from near $50 in late November 2016 to just above $10 by mid-June 2017. The stock sold off nearly 40% in one day in late April on news that its CEO and CFO were stepping down and the company lowered revenue guidance. Basically, the company has been struggling.
With the stock trading lower, it attracted some attention as a potential acquisition target. On June 23, SNCR said it received a non-binding indication of interest from Siris Capital to acquire the company for $18 per share in cash. SNCR said at the time it will review the offer.
Then, on September 19, Synchronoss provided an update on its ongoing strategic alternatives process. SNCR said it remains in active discussions with Siris Capital Group and other interested parties regarding a range of potential strategic transactions. The stock sold off on this as perhaps investors were concerned that the $18 deal may not materialize.
That brings us to the news that came out Friday after the close and is causing the stock to trade higher today. SNCR said its strategic alternatives process remains underway and it continues to explore a full range of alternatives. Of note, SNCR disclosed that Siris Capital recently informed SNCR that Siris would terminate its discussions regarding a potential transaction unless Synchronoss agreed to negotiate exclusively with Siris.
Given the status of the process and the continued interest from other parties, Synchronoss has determined that entering into an exclusivity agreement with Siris at this time is not in its best interest. SNCR went on to say it remains in active discussions with multiple parties and has received what it believes to be attractive proposals compared to the most recent proposal from Siris.
In sum, the stock is rallying today on the news that SNCR is attracting interest from other potential acquirers, not just Siris Capital. Nothing is firm right now, but investors are thrilled to hear this news. They are hoping a deal gets done.