Synchronoss Announces Sale of Messaging and NetworkX Businesses to Lumine Group as Part of Ongoing Strategic Alternatives Review Process

Transaction Enhances Capital Structure and Sharpens Focus as a Pure-Play Cloud Company

BRIDGEWATER, N.J., Nov. 01, 2023 (GLOBE NEWSWIRE) -- Synchronoss Technologies, Inc. (“Synchronoss” or the “Company”) (Nasdaq: SNCR), a global leader and innovator in cloud, messaging, and digital products and platforms, today announced the sale of its Messaging and NetworkX businesses to Lumine Group Inc. (“Lumine Group” or “Lumine”)(TSXV: LMN) for total consideration of up to $41.8 million. This transaction is part of an ongoing strategic alternatives review process designed to maximize shareholder value and is expected to unlock additional value in Synchronoss’ cloud business.

Synchronoss is now solely focused on providing its industry-leading, cloud-centric solutions. This transaction enables a more streamlined, focused operating model to meet the demands of the evolving cloud market landscape more effectively while expanding the Company’s operating margins and cash flows. The proceeds from the sale will also enable the Company to continue improving its current capital structure through the redemption of a portion of its outstanding preferred stock.

Synchronoss currently expects that its go-forward business will have gross margins of greater than 70% and adjusted EBITDA margins of greater than 25% by the end of fiscal year 2024. The Company is targeting material generation of cash flows, net of preferred stock dividends, which will enable further improvements to its capital structure. The Company plans to provide further details regarding its financial expectations for its pure-play, go-forward business in conjunction with its quarterly earnings press release in November 2023.

“Over the past two years, Synchronoss has embraced a cloud-first strategy, resulting in consistent subscriber and cash growth within our Cloud business as well as facilitating global customer expansion,” said Jeff Miller, CEO of Synchronoss. “We believe Lumine Group is well positioned to support the future ambitions of the Messaging and NetworkX businesses. This transaction helps ensure a smooth transition for our employees and valued customers, while sharpening Synchronoss’ operational focus and bolstering our market presence. This strategic move takes our cloud-first strategy to the next level, positioning Synchronoss as a cloud-only enterprise and fortifying the financial and operational foundations for future growth and opportunities. It also allows partners, investors, and other interested parties to evaluate Synchronoss based on its cloud business in a clean structure as we continue our transformation and evaluation of additional strategic options with our financial advisor, UBS Investment Bank.”