By Alan Hatfield
Syniverse Holdings, Inc. on Tuesday raised both full-year revenue and earnings forecasts ahead of an upcoming vote to take the company public through a SPAC merger.
The company expects 2022 revenue in the range of $840 million and $875 million, or 10% higher at the midpoint from its prior $780 million target. Adjusted EBITDA followed suit with a 2% increase at the midpoint from the prior target, increasing from $235 million to $245 million.
In August 2021, the mobile communications and cloud technology announced plans to go public via a SPAC merger with M3-Brigade Acquisition II Corp. (NYSE: MBAC). The updated outlook comes in advance of a special shareholder meeting to approve the merger on February 9th. The renamed Syniverse Technologies Corporation will list on the New York Stock Exchange under the symbol “SYNV” upon closing of the transaction.
Counting 800 carriers and 450 enterprise customers including AT&T Inc. and Verizon Communications Inc., the Tampa-based mobile platform provider is set to be valued at $2.85 billion, including debt, with $1.165 billion going on the balance sheet in cash proceeds. Some $265 million of this cash was raised via a private placement with investors including Oak Hill Advisors and Brigade Capital Management.
The private placement is comprised of $69.2 million in common stock at $10 a share along with $195.8 million in 7.5%-dividend convertible preferred stock with a conversion price of $11.50 a share. Twilio Inc. also agreed to inject at least $500 million, and as much as $750 million, into Syniverse..
Both 5G and mobile messaging’s expanding role as a primary means of communication over email continue to propel Syniverse’s growth. The company’s Enterprise business is also expanding as a percentage of total revenue.
“Today’s preliminary results show that we continue to execute our strategic growth plan and are very well positioned to deliver the mobile ecosystem solutions necessary to monetize 5G data and messaging and create long-term value for shareholders,” said Andrew Davies, CEO of Syniverse. “We’re very encouraged by the strong growth momentum in our Carrier and Enterprise businesses.”
Syniverse has become “integral in the mobile-centric 5G world,” said M3-Brigade CEO Mo Meghji.