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ACQUISITIONS AND DIVESTITURES | 12 Months Ended
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Nov. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Business Combination Disclosure | ACQUISITIONS: Webhelp Combination Background On September 25, 2023, the Company completed its acquisition (the “Webhelp Combination”) of all of the issued and outstanding capital stock (the “Shares”) of Marnix Lux SA, a public limited liability company (société anonyme) incorporated under the laws of the Grand Duchy of Luxembourg (“Webhelp Parent”) and the parent company of the Webhelp business (“Webhelp”), from the holders thereof (the “Sellers”). Webhelp was a leading provider of CX solutions, including sales, marketing, and payment services, with significant operations and client relationships in Europe, Latin America, and Africa. The Webhelp Combination was completed pursuant to the terms and conditions of the Share Purchase and Contribution Agreement, dated as of June 12, 2023, as amended by the First Amendment to the Share Purchase and Contribution Agreement, dated as of July 14, 2023 (the “SPA”), by and among Concentrix, OSYRIS S.à r.l., a private limited liability company (société à responsabilité limitée) incorporated under the laws of the Grand Duchy of Luxembourg and a direct wholly owned subsidiary of Concentrix Corporation, Webhelp Parent, the Sellers, and certain representatives of the Sellers. Purchase price consideration The total purchase price consideration, net of cash and restricted cash acquired, for the acquisition of Webhelp was $3,774.8 million, which was funded by proceeds from the Company’s August 2023 offering and sale of senior notes, term loan borrowings under the Company’s senior credit facility, the issuance of shares of common stock, par value $0.0001 per share, of Concentrix Corporation (the “Concentrix common stock”), and cash on hand. See Note 9—Borrowings for a further discussion of the Company’s senior notes, term loan, and senior credit facility. The purchase price consideration to acquire Webhelp consisted of the following:
Cash consideration for Shares (1) | $ | 529,160 |
Cash consideration for repayment of Webhelp debt and shareholder loan (2) | 1,915,197 |
Total cash consideration | 2,444,357 |
Equity consideration (3) | 1,084,894 |
Earnout shares contingent consideration (4) | 32,919 |
Sellers’ note consideration (5) | 711,830 |
Total consideration transferred | 4,274,000 |
Less: Cash and restricted cash acquired (6) | (499,211) |
Total purchase price consideration | $ | 3,774,789 |
(1) Represents the cash consideration paid, and to be paid, in the aggregate amount of €500,000, as adjusted in accordance with the SPA. (2) Represents the cash consideration paid to repay Webhelp’s outstanding senior loan debt and shareholder loan. (3) Represents the issuance of 14,862 shares of Concentrix common stock. (4) Represents the contingent right for the Sellers to earn an additional 750 shares of Concentrix common stock (the “Earnout Shares”). The estimated fair value of this contingent consideration was determined using a Monte-Carlo simulation model. The inputs include the closing price of Concentrix common stock as of the Closing Date (as defined below), Concentrix-specific historical equity volatility, and the risk-free rate. See further details below. (5) Represents a promissory note issued by Concentrix Corporation in the aggregate principal amount of €700,000 to certain Sellers. See Note 9—Borrowings for a further discussion of this promissory note. (6) Represents the Webhelp cash and restricted cash balance acquired at the Closing Date. The Company granted Sellers the contingent right to earn the Earnout Shares if certain conditions set forth in the SPA occur, including the share price of Concentrix common stock reaching $170.00 per share within seven years from the closing date of the Webhelp Combination (the “Closing Date”) (based on daily volume weighted average prices measured over a specified period). Prior to the Closing Date, Concentrix and certain Sellers entered into stock restriction agreements (the “Stock Restriction Agreements”), pursuant to which such Sellers (the “Restricted Stock Participants”) agreed to contribute in kind to the Company, and the Company agreed to receive, certain of the Restricted Stock Participants’ Shares in exchange for the issuance of shares of Concentrix common stock with certain restrictions thereon (the “Restricted Shares”) in lieu of such Sellers’ right to a portion of the Earnout Shares. On the Closing Date, the Company issued approximately 80 Restricted Shares in exchange for certain of the Restricted Stock Participants’ Shares. The Restricted Shares are non-transferable and non-assignable and are not entitled to any dividends or distributions unless and until the restrictions lapse, as set forth in the Stock Restriction Agreements. The Restricted Shares will be automatically cancelled by the Company for no consideration in the event that the restrictions on the Restricted Shares do not lapse. The Restricted Stock Participants have waived any and all rights as a holder of Restricted Shares to vote on any matter submitted to the holders of Concentrix common stock. Purchase price allocation The acquisition was accounted for as a business combination in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. The purchase price was allocated to the assets acquired and liabilities assumed based on management’s estimate of the respective fair values at the date of acquisition. Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The factors contributing to the recognition of goodwill were the assembled workforce, comprehensive service portfolio delivery capabilities and strategic benefits that are expected to be realized from the acquisition. None of the goodwill is expected to be deductible for income tax purposes. The following table summarizes the final fair values of the assets acquired and liabilities assumed as of the acquisition date:
| As of
| September 25, 2023
Assets acquired: |
Cash and cash equivalents | $ | 310,313 |
Accounts receivable | 449,152 |
Other current assets (1) | 450,079 |
Property and equipment | 324,007 |
Identifiable intangible assets | 1,984,000 |
Goodwill | 2,145,974 |
Deferred tax assets | 20,735 |
Other assets | 409,268 |
Total assets acquired | 6,093,528 |
Liabilities assumed: |
Accounts payable | 67,983 |
Accrued compensation and benefits | 259,548 |
Other accrued liabilities | 573,906 |
Income taxes payable | 75,075 |
Debt (current portion and long-term) | 8,589 |
Deferred tax liabilities | 410,481 |
Other long-term liabilities | 423,946 |
Total liabilities assumed | 1,819,528 |
Total consideration transferred | $ | 4,274,000 |
(1) Includes restricted cash acquired of $188,898. As a result of further refining its estimates and assumptions since the date of the acquisition, the Company recorded measurement period adjustments to the initial purchase price allocation. Adjustments were primarily made to cash, goodwill, accrued compensation and benefits, accrued liabilities, other long-term liabilities and deferred income taxes. The adjustments in other long-term liabilities primarily related to an increase in uncertain tax positions of $23,075. These measurement period adjustments resulted in an increase of $60,630 to goodwill. The purchase price allocation includes $1,984,000 of acquired identifiable intangible assets, all of which have finite lives. The fair value of the identifiable intangible assets has been estimated by using the income approach through a discounted cash flow analysis of certain cash flow projections. The cash flow projections are based on forecasts used by the Company to price the Webhelp Combination, and the discount rates applied were benchmarked by referencing the implied rate of return of the Company’s pricing model and the weighted average cost of capital. The intangible assets are being amortized over their estimated useful lives on either a straight-line basis or an accelerated method that reflects the economic benefit of the asset. The determination of the useful lives is based upon various industry studies, historical acquisition experience, economic factors, and future forecasted cash flows of the Company following the acquisition of Webhelp. The amounts allocated to intangible assets are as follows:
| Gross Carrying Amount |  | Weighted-Average Useful Life |  | Amortization Method
Customer relationships | $ | 1,882,000 |  |  | 15 years |  | Accelerated
Trade name | 102,000 |  |  | 3 years |  | Straight-line
Total | $ | 1,984,000 |  |  |  |  |
Supplemental Pro Forma Information (unaudited) The supplemental pro forma financial information presented below is for illustrative purposes only, does not include the pro forma adjustments that would be required under Regulation S-X for pro forma financial information, is not necessarily indicative of the financial position or results of operations that would have been realized if the combination with Webhelp had been completed on December 1, 2021, does not reflect synergies that might have been achieved, nor is it indicative of future operating results or financial position. The pro forma adjustments are based upon currently available information and certain assumptions that the Company believes are reasonable under the circumstances. The supplemental pro forma financial information reflects pro forma adjustments to present the combined pro forma results of operations as if the combination with Webhelp had occurred on December 1, 2021 to give effect to certain events that the Company believes to be directly attributable to the acquisition. These pro forma adjustments primarily include: •A net increase in amortization expense that would have been recognized due to acquired identifiable intangible assets. •A net increase to interest expense to reflect the additional borrowings of Concentrix incurred in connection with the combination as previously described and the repayment of Webhelp’s historical debt in conjunction with the combination. •The related income tax effects of the adjustments noted above. The supplemental pro forma financial information for the prior fiscal years ended November 30, 2023 and 2022 is as follows:
| Fiscal Years Ended November 30,
| 2023 |  | 2022
Revenue | $ | 9,485,600 |  |  | $ | 8,919,195 |
Net income | 177,611 |  |  | 238,242 |
PK Acquisition Background On December 27, 2021, the Company completed its acquisition of PK, a leading CX design engineering company with more than 5,000 staff in four countries. PK created pioneering experiences that accelerated digital outcomes for their clients’ customers, partners and staff. The acquisition of PK expanded the Company’s scale in the digital IT services market and supported the Company’s growth strategy of investing in digital transformation to deliver exceptional customer experiences. The addition of the PK staff and technology to the Company’s team further strengthened its capabilities in CX design and development, artificial intelligence (“AI”), intelligent automation, and customer loyalty. Purchase price consideration The total purchase price consideration, net of cash and restricted cash acquired, for the acquisition of PK was $1,573.3 million, which was funded by proceeds from the Company’s term loan under its prior credit agreement dated as of October 16, 2020 (the “Prior Credit Facility”) and additional borrowings under its accounts receivable securitization facility (the “Securitization Facility”). See Note 9—Borrowings for a further discussion of the Company’s term loan, senior credit facility and the Securitization Facility. The purchase price consideration to acquire PK consisted of the following:
Cash consideration for PK stock (1) | $ | 1,177,342 |
Cash consideration for PK vested equity awards (2) | 246,229 |
Cash consideration for repayment of PK debt, including accrued interest (3) | 148,492 |
Cash consideration for transaction expenses of PK (4) | 22,842 |
Total cash consideration | 1,594,905 |
Non-cash equity consideration for conversion of PK equity awards (5) | 15,725 |
Total consideration transferred | 1,610,630 |
Less: Cash and restricted cash acquired (6) | 37,310 |
Total purchase price consideration | $ | 1,573,320 |
(1) Represents the cash consideration paid for the outstanding shares of PK common stock, which includes the final settlement of the merger consideration adjustment paid pursuant to the merger agreement. (2) Represents the cash consideration paid for certain vested PK stock option awards and restricted stock unit awards. (3) Represents the cash consideration paid to retire PK’s outstanding third-party debt, including accrued interest. (4) Represents the cash consideration paid for expenses incurred by PK in connection with the merger and paid by Concentrix pursuant to the merger agreement. These expenses primarily related to third-party consulting services. (5) Represents the issuance of vested Concentrix stock options that were issued in conversion of certain vested PK stock options that were assumed by Concentrix pursuant to the merger agreement. (6) Represents the PK cash and restricted cash balance acquired at the acquisition. Purchase price allocation The acquisition was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations. The purchase price was allocated to the assets acquired, liabilities assumed and non-controlling interest based on management’s estimate of the respective fair values at the date of acquisition. Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The factors contributing to the recognition of goodwill were the assembled workforce, comprehensive service portfolio delivery capabilities and strategic benefits that are expected to be realized from the acquisition. None of the goodwill is deductible for income tax purposes. The following table summarizes the final fair values of the assets acquired, liabilities assumed and non-controlling interest as of the acquisition date:
| As of
| December 27, 2021
Assets acquired: |
Cash and cash equivalents | $ | 30,798 |
Accounts receivable | 85,367 |
Property and equipment | 11,158 |
Operating lease right-of-use assets | 12,288 |
Identifiable intangible assets | 469,300 |
Goodwill | 1,119,068 |
Other assets | 26,449 |
Total assets acquired | 1,754,428 |
Liabilities assumed and non-controlling interest: |
Accounts payable and accrued liabilities | 78,092 |
Operating lease liabilities | 12,288 |
Deferred tax liabilities | 51,418 |
Non-controlling interest | 2,000 |
Total liabilities assumed and non-controlling interest | 143,798 |
Total consideration transferred | $ | 1,610,630 |
The purchase price allocation includes $469,300 of acquired identifiable intangible assets, all of which have finite lives. The fair value of the identifiable intangible assets has been estimated by using the income approach through a discounted cash flow analysis of certain cash flow projections. The cash flow projections are based on forecasts used by the Company to price the PK acquisition, and the discount rates applied were benchmarked by referencing the implied rate of return of the Company’s pricing model and the weighted average cost of capital. The intangible assets are being amortized over their estimated useful lives on either a straight-line basis or an accelerated method that reflects the economic benefit of the asset. The determination of the useful lives is based upon various industry studies, historical acquisition experience, economic factors, and future forecasted cash flows of the Company following the acquisition of PK. The amounts allocated to intangible assets are as follows:
| Gross Carrying Amount |  | Weighted-Average Useful Life |  | Acceleration Method
Customer relationships | $ | 398,600 |  |  | 15 years |  | Accelerated
Technology | 63,500 |  |  | 5 years |  | Straight-line
Trade name | 5,000 |  |  | 3 years |  | Straight-line
Non-compete agreements | 2,200 |  |  | 3 years |  | Straight-line
Total | $ | 469,300 |  |  |  |  |
ServiceSource Acquisition Background On July 20, 2022, the Company completed its acquisition of ServiceSource International, Inc. (“ServiceSource”), a global outsourced go-to-market services provider, delivering business-to-business (“B2B”) digital sales and customer success solutions that complemented Concentrix’ offerings in this area. Purchase price consideration The total purchase price consideration, net of cash acquired, for the acquisition of ServiceSource was $141.5 million, which was primarily funded by cash on the Company’s balance sheet, as well as borrowings under the Company’s Securitization Facility. The purchase price consideration to acquire ServiceSource consisted of the following:
Cash consideration for ServiceSource stock (1) | $ | 150,392 |
Cash consideration for ServiceSource vested and unvested equity awards (2) | 6,704 |
Cash consideration for repayment of ServiceSource debt, including accrued interest (3) | 10,063 |
Total consideration transferred | 167,159 |
Less: Cash and restricted cash acquired (4) | 25,652 |
Total purchase price consideration | $ | 141,507 |
(1) Represents the cash consideration paid for the outstanding shares of ServiceSource common stock. (2) Represents the cash consideration paid or to be paid for vested and unvested ServiceSource stock option awards, restricted stock units and performance stock units. (3) Represents the cash consideration paid to retire ServiceSource’s outstanding third-party debt, including accrued interest. (4) Represents the ServiceSource cash and restricted cash balance acquired at the acquisition. Purchase price allocation The purchase price was allocated to the assets acquired and liabilities assumed based on management’s estimate of the respective fair values at the date of acquisition. Goodwill was calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The factors contributing to the recognition of goodwill were the assembled workforce, high-value service delivery capabilities and strategic benefits that are expected to be realized from the acquisition. None of the goodwill is deductible for income tax purposes. The following table summarizes the final fair values of the assets acquired and liabilities assumed as of the acquisition date:
| As of
| July 20, 2022
Assets acquired: |
Cash and cash equivalents | $ | 24,355 |
Accounts receivable | 40,097 |
Property and equipment | 8,112 |
Operating lease right-of-use assets | 29,487 |
Identifiable intangible assets | 40,200 |
Goodwill | 34,910 |
Net deferred tax assets | 32,701 |
Other assets | 19,649 |
Total assets acquired | 229,511 |
Liabilities assumed: |
Accounts payable and accrued liabilities | 32,865 |
Operating lease liabilities | 29,487 |
Total liabilities assumed | 62,352 |
Total consideration transferred | $ | 167,159 |
The purchase price allocation includes $40,200 of acquired identifiable intangible assets, all of which have finite lives. The fair value of the identifiable intangible assets has been estimated using the income approach through a discounted cash flow analysis of certain cash flow projections. The intangible assets are being amortized over their estimated useful lives on either a straight-line basis or an accelerated method that reflects the economic benefit of the asset. The determination of the useful lives is based upon various industry studies, historical acquisition experience, economic factors, and future forecasted cash flows of the Company following the acquisition of ServiceSource. During the measurement period included in the fiscal year ended November 30, 2023, measurement period adjustments were recorded to finalize net deferred tax assets at the acquired value as disclosed in the table above, resulting in a corresponding decrease to goodwill. The amounts allocated to intangible assets are as follows:
| Gross Carrying Amount |  | Weighted-Average Useful Life |  | Acceleration Method
Customer relationships | $ | 31,370 |  |  | 15 years |  | Accelerated
Technology | 5,640 |  |  | 5 years |  | Straight-line
Trade name | 3,190 |  |  | 3 years |  | Straight-line
Total | $ | 40,200 |  |  |  |  |
Acquisition-related and integration expenses In connection with the Webhelp Combination and the acquisitions of PK and ServiceSource, the Company incurred $156,771, $71,336, and $33,763 of acquisition-related and integration expenses for the fiscal years ended 2024, 2023 and 2022, respectively. These expenses primarily include severance and employee-related costs, legal and professional services, cash-settled awards, retention payments and costs associated with facilities consolidation, including lease terminations to integrate the businesses. These acquisition-related and integration expenses were recorded within selling, general and administrative expenses in the consolidated statement of operations.

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