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SYNNEX Corporation SNX has moved a step closer to its planned spin-off of the Concentrix business. The IT solution provider on Tuesday announced filing a Form 10 Registration Statement with the U.S. Securities and Exchange Commission (SEC) in this regard.
Earlier, during first-quarter fiscal 2020, the company had submitted a confidential draft registration statement on Form 10. SYNNEX stated that the removal of confidential status will facilitate investors’ access to additional information regarding Concentrix separation. The company expects to complete the spin-off in fourth-quarter fiscal 2020.
On Jan 9, SYNNEX announced its plan to divest the Concentrix business, which will qualify as a tax-free transaction for the company as well as shareholders. Following the spin-off, SYNNEX shareholders will own equal shares of both companies. Management believes this strategic action would help boost shareholder value and enhance the company's competitive edge.
SYNNEX Corporation Price and Consensus
SYNNEX Corporation price-consensus-chart | SYNNEX Corporation Quote
After the separation, SYNNEX will focus on IT distribution, logistics and integration services. Per the company, the business entity will have annualized revenues of approximately $19 billion and will remain among the top three Americas and Japan IT distribution companies. With annualized revenues of $4.7 billion, Concentrix will continue to focus on providing technology-enabled global business services.
SYNNEX had acquired Concentrix in 2006. Since then, it has transformed the business from the provider of call center, database analysis, and print-on-demand services into a global service powerhouse.
Zacks Rank & Stocks to Consider
Currently, SYNNEX carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader technology sector are salesforce.com inc. CRM, Blackbaud, Inc. BLKB and Synaptics Incorporated SYNA, each flaunting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Salesforce, Blackbaud and Synaptics is currently pegged at 18%, 10% and 7.6%, respectively.
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