JANUARY 2024
Synchronoss Technologies (Nasdaq: SNCR) creates engaging, branded, subscriber personal cloud solutions for operators. With over a dozen service providers around the world using Synchronoss' cloud solutions, the business has over 10 million cloud subscribers and 50 million images uploaded daily.
In November 2023, Lumine Group acquired two business units from Synchronoss, Messaging and NetworkX, which were primarily the result of three previous acquisitions by Synchronoss. Following the acquisition, Lumine has been developing these brands into three distinct business units — SpatialNetworX, Razorflow, and Openwave —to clearly distinguish their product offerings and serve their respective market domains.
“Lumine has a decade of expertise in strengthening and growing communications and media software businesses. Successful divestitures, such as this with Synchronoss, underscore our ability to provide corporate sellers with certainty of execution and peace of mind knowing their divesting asset will never be resold to a competitor,” said Tony Garcia, Group President at Lumine. As a Group President, Tony sponsored the transaction, providing oversight for the Lumine M&A execution team throughout the process. Tony and his team will continue to be engaged in the post-acquisition operations ensuring a smooth transition.“It provides an opportunity to support sellers in achieving their organization’s objectives, and at the same time, provides the divested asset with a bright new chapter.”
Decision to Divest 
Jeff Miller was named President and Chief Executive Officer of Synchronoss Technologies in March 2021. Since that time, Jeff has focused on driving Synchronoss’ growth and profitability, through expansion of the Company’s Cloud business. Prior to this, Jeff served as the company’s Chief Commercial Officer, with responsibility for all processes and strategies related to building profitable sales channels and accelerating revenue growth. Jeff brings over 20 years of experience to his role, ranging from Telcos to mobile technologies and smart solutions for commercial buildings and spaces.
Our conversation with Jeff takes a closer look at the decision-making behind Synchronoss’ divestiture to Lumine Group. We explore the motivations for selling, the strategic fit with Lumine, and how this move sets the stage for a new future for both the divested assets and Synchronoss.
Lumine Group: What prompted Synchronoss to divest these two business units?
Jeff Miller: The decision to divest represents a significant step towards taking Synchronoss’ 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.
About three years ago, we began a strategy assessment to determine which businesses and product lines aligned with the future of Synchronoss, would provide better long-term shareholder return, and improve clarity and focus on the business. At the time, we had a very diverse set of products, which made it challenging for investors to understand who we were, so this was an opportunity to convey a clearer narrative to both our customers and investor base.
During this process, we determined it would be beneficial to clarify Synchronoss’ mission to become a cloud-only company, and to take steps in this process that would have a clearer story for our customers and investors.
We made significant strides in 2021 by improving the profitability of all product lines and additional progress in 2022 by divesting a series of digital product assets to another company. Now, the divestment with Lumine is a pivotal step in our journey, representing a further streamlined and focused operating model to help our company get to where we were striving to be.
Lumine Group: How does this transaction align with Synchronoss’ future objective and goals?
Jeff Miller: We’re now in a situation where our investment community can understand our business, and our employee base can focus on a single area of growth and future expansion.
This also helps clarify for our large cloud customers that we’re all in, we’re completely behind them, which is very important to us. When you serve large clients, it’s important that they know there’s no distraction from the largest priority of their business.
Lumine Group: What synergies or strategic advantages did you see by divesting to Lumine?
Jeff Miller: Lumine is an extremely credible buyer of other companies and assets. It was important to us to ensure continuity of success for our customers who we were already serving, and that they were going to go somewhere with a great future. Somewhere that does not simply trade in businesses, but invests in them, prioritizes building long-lasting relationships, and helps them grow.
It was also important that employees transition into a company that would prioritize a smooth experience, could provide future learning and professional development opportunities, and had a promising future.
After our initial meetings with Lumine, the professionalism and experience, evident in initial meetings and the due diligence process, gave us confidence in their ability to meet our criteria.
Lumine Group: Were there other specific criteria you prioritized when evaluating potential buyers for this divestiture?
Jeff Miller: The make-up of the leadership team and the organization’s track record of performance was very important. It was imperative that we saw evidence of success from Lumine. Learning how Lumine invests in businesses and allows them to run independently, all while holding the teams accountable to success, was a key element in our decision-making. We felt that this could work. This could be successful.
Lumine Group: In addition to the other values, we’ve discussed – buy and hold forever, ensuring customer and employee continuity – what else gave you confidence that Lumine was the ideal home for Synchronoss’ divested assets?
Jeff Miller: Lumine places a focus on growth, but more importantly, Lumine has the experience and Playbook to help businesses achieve it. We believe that these businesses are now in a better position to grow because of this focus. From what I’ve learned about the Playbook, it will improve the operating discipline of those businesses in a manner that will be better for all the employees and for the businesses.
I’ll also mention that there was great credibility to have a known entity involved in this transaction from start to finish, and that was Tony Garcia. Tony had worked at Synchronoss previously. He knows the business. He knows the strengths and weaknesses. That gave us confidence that his knowledge was going to lead to a successful transaction.
Lastly, the collaboration that took place during our due diligence and negotiation process – which is not always easy – was handled very professionally on both sides along the way.
Lumine Group: What advice would you offer other CEOs considering divestment with Lumine?
Jeff Miller: Look at the track record, it’s the best indication of future success. Do the due diligence to ensure that the business has the wherewithal and the investment capability to “put more wood behind the arrow” of the businesses that they might be considering divesting to Lumine.
Your experience in managing the transaction process was also evident. I have not seen any major surprises or hiccups after the transaction either, which is of equal importance.
I’ll also compliment the rejuvenation of some old brands that was done as part of this transaction. It has been great to see what the Lumine team has built to bring these brands back to life. If you were part of the Messaging business, and now, you’re part of the rejuvenated brand Openwave, you now have your own brand identity, you have your own CEO who intimately knows the business. It provides an enhanced focus to make it successful. I just think that is a great model, and it feels great to support the businesses in their next chapter.
