Convergys To Acquire Stream Global Services For $820 Mln - Quick Facts

(RTTNews) - Convergys Corp. (CVG) and Stream Global Services, Inc., announced entry into a definitive merger agreement under which Convergys will acquire Stream for a total enterprise value of $820 million in cash, subject to certain adjustments, from funds managed by Ares Management and Providence Equity Partners, as well as from LiveIt, the BPO investment arm of Ayala Corp.

Convergys also announced the transaction is expected to add about $0.35 per share in the first 12 months after close, excluding one-time charges, intangible amortization and integration costs.

Convergys stated that by adding Stream's complementary client base, geographic footprint and service capabilities, the company expects the acquisition to expand and strengthen its US and global presence in the $55 billion outsourced customer management services industry.

When combined, total company revenue is expected to exceed $3 billion, creating the second largest customer management services provider in the world.

The transaction is expected to close in the first quarter of 2014.

Convergys also announced its intention to finance the transaction through $400 million of cash on hand, a new $350 million term loan for which Convergys has received a commitment letter from Citigroup Global Markets Inc. and BofA Merrill Lynch, and existing credit facilities for the balance, although obtaining such financing is not a condition to the closing of the transaction. Convergys expects to extend its accounts receivable securitization and revolving credit facilities, and upon closing, to have at least $550 million in available liquidity including undrawn credit facilities, cash and short term investments.

Convergys also reaffirmed its 2013 guidance for revenue to approximate $2.05 billion and adjusted earnings from continuing operations to approximate $1.10. Analysts currently expect earnings of $1.10 per share on revenue of $2.05 billion for the full year.