What happened
Shares of cloud software specialist Synchronoss Technologies (SNCR +0.00%) jumped on Friday after it was revealed that Siris Capital had taken a significant stake in the company. Synchronoss stock tumbled in late April after the company announced disappointing preliminary Q1 earnings and the exit of its CEO and CFO. As of 11:30 a.m. EDT, shares of Synchronoss were up about 12%.
So what
Siris Capital Group filed a Schedule 13D with the SEC to disclose that it had acquired roughly 6 million shares of Synchronoss between April 27 and May 4, immediately following the news that sent the stock crashing. That's good for a nearly 13% stake.
Image source: Synchronoss Technologies.
This stake is unlikely to be passive. On May 4, Siris managing partner Frank Baker met with Synchronoss CEO Stephen Waldis, informing him that there was interest in discussing one or more potential strategic transactions, possibly including a take-private or major minority investment.
The letter sent to the board of directors announcing the stake states that Siris is supportive of the new management team, and that it believes that the company has "strong assets that are well-positioned to address both the carrier and enterprise markets." Siris believes that Synchronoss is misunderstood by the public markets.
Now what
The departure of the CEO and CFO last month came on the heels of the acquisition of Intralinks. Former CEO Ronald Hovsepian was the CEO of Intralinks before the acquisition, and his abrupt replacement suggests that something went seriously wrong with the integration.
Siris believes that the tumbling stock price following that announcement created an opportunity. Only time will tell if it's right.
