Synchronoss Technologies to Issue $100M Common Stock and $125M Senior Notes; Shares Skyrocket 21%

Synchronoss Technologies, Inc. (SNCR) announced the public offering of $100 million worth of the company’s common stock and a Senior Notes offering worth $125 million, due 2026. Reacting to the news, shares skyrocketed 21.3% to close at $3.53 on June 25.

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Synchronoss Technologies is a global leader and innovator in cloud, messaging, and digital products and platforms. (See Synchronoss Technologies stock chart on TipRanks)

The public offering for 38,461,538 shares of its common stock at $2.60 per share amounts to gross proceeds of $100 million. The offering, subject to certain closing conditions, is expected to close on June 29.

Also, the underwriters are granted a 30-day option to purchase an additional 10% of the total shares offered at the same terms and conditions.

Additionally, B. Riley Principal Investments, LLC (“BRPI”), an affiliate of the underwriters B. Riley Securities, Inc (BRS), has agreed to purchase $75.0 million of the Company’s Series B Preferred Stock in a private transaction, to be completed concurrently with the closing of the offering.

In a separate release, the company undertook a public offering of its 8.375% Senior Notes, due 2026, for an aggregate principal amount of $125 million. The underwriters are given an option to purchase an additional $5 million of the Senior Notes.

The offering is expected to close on June 30, subject to mandatory closing conditions.

Both Synchronoss and its Senior Notes received a rating of BB- from Egan-Jones Ratings Company. The Notes are expected to trade on the Nasdaq Global Select Market under the symbol “SNCRL” within 30 business days from the closing date of the offering.

All of the proceeds from the Common Shares offering, Senior Notes offering, and sale of Series B Preferred Stock will be utilized to redeem all outstanding shares of Synchronoss’ Series A Convertible Participating Perpetual Preferred Stock. The proceeds will also repay amounts outstanding under Synchronoss’ revolving credit facility.

The stock has a Strong Buy consensus rating based on 4 unanimous Buys. The average analyst Synchronoss Technologies of price target of $7.73 implies 119% upside potential from current levels.

Also, SNCR scores an 8 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.