Concentrix guarantees Synnex facilities, Convergys facilities canceled

By Wendy Van Sickle

Columbus, Ohio, Oct. 5 – Concentrix CVG and some of its U.S. domestic subsidiaries joined as guarantors under a Nov. 27, 2013 credit agreement with Synnex Corp. as borrower and Bank of America, NA as administrative agent and an Aug. 9 credit agreement with Synnex as borrower and JPMorgan Chase Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The move came on Friday in connection with Synnex’s acquisition of Convergys Corp. for $2.8 billion, after which Concentrix was left as the surviving entity.

The Bank of America credit agreement provides for $1.8 billion spread over two tranches.

The tranches include a $600 million revolving credit facility and a term loan in the original principal amount of $1.2 billion.

Borrowings bear interest at Libor plus a margin that ranges from 125 basis points to 200 bps, depending on consolidated leverage ratio. The revolving commitment fee ranges from 17.5 bps to 30 bps.

Synnex may request to increase the revolver or term loan commitments by $500 million, plus an additional amount that depends on Synnex’s pro forma first-lien leverage ratio.

The credit agreement matures in September 2022.

The outstanding principal amount of the term loan is repayable in quarterly installments of $15 million.

The JPMorgan credit agreement provides for up to $1.8 billion in term loans, of which $1.45 billion was borrowed at closing in August to help fund the cash portion of the acquisition and to repay some debt at Convergys, according to a separate 8-K filing. The remaining balance is available to be used for working capital and other general corporate purposes.

The agreement matures in October 2023.

Synnex may borrow up to five additional term loans over the next 90 days in an amount up to $350 million.

Borrowings bear interest at Libor plus a margin ranging from 125 bps to 175 bps, based on the consolidated leverage ratio. Initially, interest is Libor plus 150 bps. The commitment fee ranges from 15 bps to 25 bps and is initially 20 bps.

JPMorgan, Merrill Lynch, Pierce, Fenner & Smith Inc., MUFG Bank, Ltd. and Bank of Nova Scotia are joint lead arrangers and bookrunners. Bank of America, NA, MUFG and Scotiabank are co-syndication agents. Sumitomo Mitsui Banking Corp. and TD Bank, NA are the co-documentation agents.

Also on Friday, Convergys terminated all commitments under its credit agreement dated Jan. 11, 2017 with Citibank, NA as administrative agent, as well as its credit facility evidenced by the receivables purchase agreement dated June 30, 2009 with MUFG as agent.

Synnex is a Fremont, Calif.-based business process services company. Convergys is a Cincinnati-based customer management services provider.

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