Synchronoss Technologies, a prominent player in cloud, messaging and digital solutions, builds software that helps companies worldwide better connect with their subscribers in trusted and meaningful ways. The company’s collection of products helps streamline networks, simplify onboarding and engage subscribers to unleash new revenue streams, reduce costs and increase speed to market.

Synchronoss, established in 2000, originally focused on business process optimization services and service activation solutions for global communications service providers. In recent years, however, the company shifted toward a cloud-first strategy as it experienced growth in its cloud business and expanded its global customer base.

Therefore, the company announced a strategic move to maximize shareholder value by selling its Messaging and NetworkX businesses to Lumine Group for a total consideration of up to $41.8 million.

The Messaging and NetworkX units come from Synchronoss' previous acquisitions of SPATIALinfo (News - Alert), Razorsight and Openwave Messaging. With the sale to Lumine Group, they will be restored as three autonomous business units under Lumine Group.

As mentioned briefly, the decision is part of Synchronoss' ongoing strategic alternatives review process and is expected to unlock additional value in the company's cloud business. The company envisions its go-forward business achieving gross margins exceeding 70% and adjusted EBITDA margins surpassing 25% by the end of fiscal year 2024.

“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,” said Jeff Miller, CEO of Synchronoss. “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.”

On the other side of the transaction, Lumine Group is known for its buy-and-hold forever strategy in acquiring communications and media software businesses. This marks Lumine Group's ninth divestiture transaction in the communications and media space.

“This acquisition reinforces Lumine Group’s mission to build a leading network of communications and media software companies,” said David Nyland, CEO of Lumine Group. “These businesses bring with them an experienced leadership team and a strong, global customer network we look forward to serving. As with every acquisition, our first priority is to enable a seamless transition for both customers and employees as we welcome these businesses to Lumine Group.”