DENVER - TTEC Holdings, Inc. (NASDAQ:TTEC), a global customer experience technology and services company, has announced a proposal from its CEO, Kenneth Tuchman, to take the company private. The unsolicited preliminary offer, dated September 27, 2024, suggests a purchase price of $6.85 per share for the outstanding common stock not already owned by Tuchman, who currently holds approximately 58% of TTEC's common stock.
The proposal represents a significant premium over recent trading prices, with a 55% increase over the 30-day volume-weighted average price and a 69% premium to the closing price as of September 27, 2024. Tuchman believes that going private will benefit stakeholders by providing liquidity at a premium and allowing TTEC to focus on long-term strategies without the constraints of public company reporting.
TTEC's Board of Directors has established a Special Committee of independent directors to evaluate the offer. The completion of the deal is contingent upon several conditions, including securing financing, negotiating a definitive agreement, and receiving approval from the Special Committee and a majority of the minority shareholders.
The company has stated that there is no certainty that a definitive offer will be made or that any transaction will be completed. TTEC has not committed to providing updates unless required by law.
This news is based on a press release statement from TTEC Holdings, Inc.
In other recent news, TTEC Holdings, Inc. announced a significant leadership transition with President Michelle Swanback stepping down from her positions effective December 31, 2024. In the wake of Swanback's departure, John P. Abou and Kenneth Tuchman will assume her responsibilities within the company. This strategic realignment is part of TTEC's ongoing commitment to driving growth in the customer experience sector.
On the financial front, TTEC reported mixed results for the second quarter, with revenue standing at $534 million and adjusted EBITDA at $46 million. The company's Engage segment faced a downturn due to economic factors and reduced demand in the healthcare sector, while the Digital segment demonstrated resilience with new enterprise client wins and growth in recurring managed services. Canaccord Genuity revised its price target for TTEC Holdings following these developments, maintaining a Hold rating on the stock.
In response to operational losses and the decrease in demand in the Engage segment, TTEC is implementing cost optimization initiatives, targeting $10 million in savings this year and $30 million in annualized savings starting in 2025. The company is also focusing on diversification and geographic expansion, particularly in South Africa in 2025. Despite the challenges, TTEC Digital continues to attract new clients and expand its partner ecosystem, with over 100 AI technology implementations underway.
InvestingPro Insights
The proposed privatization offer for TTEC Holdings comes at a critical time for the company, as reflected in recent financial data and market performance. According to InvestingPro data, TTEC's market capitalization stands at $193.28 million, significantly lower than its revenue of $2.34 billion for the last twelve months as of Q2 2024. This disparity suggests that the market has been undervaluing the company relative to its sales.
The offer price of $6.85 per share represents a substantial premium over the current trading price, which aligns with InvestingPro's observation that the stock has taken a significant hit over the past year. The data shows a staggering 84.11% decline in the one-year price total return, indicating severe investor pessimism.
InvestingPro Tips highlight that TTEC operates with a significant debt burden and has been quickly burning through cash. These factors may have contributed to the CEO's decision to propose taking the company private, as it could provide more flexibility in managing the company's financial structure away from public market scrutiny.
Despite these challenges, InvestingPro Tips also point out that net income is expected to grow this year, and analysts predict the company will be profitable. This potential turnaround in profitability could be a key driver behind the privatization offer, as it suggests there may be untapped value that the market has not yet recognized.
It's worth noting that InvestingPro offers 15 additional tips for TTEC, providing a more comprehensive analysis for investors considering the implications of this potential privatization. These insights could be particularly valuable in assessing the fairness of the offer price and the company's future prospects.
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