Synchronoss Technologies Inc. is exploring a sale, in the latest
indication of brisk takeover demand for many software
companies.
The Bridgewater, N.J., company is working with investment bank
Qatalyst Partners on the possible sale, according to people
familiar with the matter. As of Tuesday's close, Synchronoss had a
market capitalization of about $1.8 billion, meaning that in a
takeover it could be valued at well over $2 billion.
Synchronoss has drawn interest from a number of private-equity
firms, the people said. As always in such situations, it is
possible a deal for the company won't materialize.
Synchronoss produces software that allows customers to activate
and perform other functions on wireless devices. Its customers
include AT&T Inc., Verizon Wireless and Apple Inc., according
to the company's website. Synchronoss, which was founded in 2000
and went public in 2006, had $457.3 million in revenue and $38.9
million in net income in 2014, both up significantly. Its shares
have jumped 34% in the past year.
While private-equity deal making has been generally muted of
late, software represents one corner of the market that has been
lively.
Private-equity firms, which make acquisitions largely using
borrowed money, have recently stepped up their buying and selling
of software companies, which are able to take on relatively high
levels of debt due to the recurring nature of their cash flows.
Permira recently agreed to purchase data-software maker Informatica
Corp., while Vista Equity Partners agreed to sell a controlling
stake in security-software company Websense Inc. to Raytheon Co.
Meanwhile, Bain Capital LLC agreed to buy security-software company
Blue Coat Systems Inc. from fellow private-equity firm Thoma Bravo
LLC.
And Genesys Telecommunications Laboratories Inc. is in talks
with potential buyers for a deal that could value the call-center
software provider at more than $3.5 billion including debt, The
Wall Street Journal reported last month.
It is also a busy time for technology-company mergers. Just this
week, chip maker Intel Corp. signed a $16.7 billion deal to buy
Altera Corp. Last week, chip maker Avago Technologies Ltd. agreed
to buy Broadcom Corp. for $37 billion, making it the largest
pure-play technology deal on record.
Write to Gillian Tan at gillian.tan@wsj.com and Dana Mattioli at
dana.mattioli@wsj.com
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