Sykes Enterprises, one of the largest public companies in the Tampa Bay area, is being sold to a private Miami company in a deal worth $2.2 billion.
The Tampa company, which provides corporate services such as customer assistance and technical support, will be sold to Sitel Group, a global customer-service firm, in an all-cash deal worth $54 per share, a 31.2 percent premium over Thursday’s stock price.
The deal is expected to close later this year, at which point Sykes will cease being traded as a public company. The combined company will operate under the Sitel name and be headquartered in Miami.
“This combination marks a major milestone in our 40-plus year operating history,” president and CEO Chuck Sykes said in a statement. “Thanks to the hard work of our team members, this transaction validates the execution of our vision, strategy, our differentiated full lifecycle business model and promises immediate and certain value for our stockholders at an attractive premium.”
Sitel, founded in 1985, has 100,000 employees in 29 countries. Sykes has 55,000 employees in 21 countries. Sykes spokesman Jesse Himsworth said it was too early to know whether any Sykes employees would be relocated or cut, but said the companies “will employ a balanced ‘best of both’ concept to fill each role in the new integrated organization.”
“There is no reduction in force planned at this time — it is business as usual,” Himsworth wrote in an email. “Leaders from both Sykes and Sitel Group will build an integration plan over the coming months with the intention of rapidly and successfully implementing that plan as soon as the transaction is complete.”
Once the deal is complete, Chuck Sykes is expected to transition out of the company, Himsworth said. Sitel president and CEO Laurent Uberti will stay on in that position. Other management roles are still being worked out.
“By combining the two companies, our expanded geographic footprint, multi-shore solutions and greater capacity to serve customers will make us better equipped to help our customers navigate the rapid changes within the sector together,” Uberti said in a statement. “We have tremendous respect for Chuck Sykes and the business he and his family have built and all they have accomplished.”
Sykes is the second of Tampa Bay’s largest public companies to reach a deal to be sold this year. In April, New Port Richey’s Welbilt, which supplies equipment to restaurants and professional kitchens, reached a deal to be sold to an Illinois company in a stock deal worth $4.3 billion. Earlier this month, Welbilt received a competing cash offer of $3.1 billion from an Italian holding company.
Two more local public companies were sold in 2020: Tampa’s WellCare Health Plans to a St. Louis firm for $17 billion and Largo’s Tech Data to a New York private equity firm for $6 billion. Tech Data has since announced plans to merge with California company Synnex in a deal worth $7.2 billion.
“We should celebrate every time a Tampa Bay entrepreneur sells, because it brings money into our community that is reinvested in other businesses,” said Tampa City Council member Bill Carlson. “It’s outside validation that we’re building wealth and success in our community. The more we sell, the more money there is to build the next Tech Data, the next Sykes.”
Sykes reported record quarterly revenues during the coronavirus pandemic, as gains in its health care, technology and financial services sectors offset losses in its hotel and travel operations. The company saw revenues of $1.7 billion in 2020, up nearly 6 percent from 2019, although its net income dropped from $64 million to $56.4 million.
Sykes stock rose about 30 percent Friday, reaching more than $53 per share by mid-afternoon.
Sykes was founded in 1977 by Chuck Sykes’ father, John Sykes, who bought a small Charlotte company and renamed it. The company moved from Charlotte to Tampa in 1993 and grew quickly; its clients over the years have included IBM, Apple and Gateway.
John Sykes handed his son the roles of CEO and chairperson in 2004. But he and the Sykes name have remained a highly visible presence around Tampa Bay.
The company’s name adorns the top of the Rivergate Tower, often called the “beer can building.” The University of Tampa has a John H. Sykes College of Business and Sykes Chapel and Center for Faith and Values. John Sykes and his wife Susan have remained steadfast supporters of the university, funding projects and speaking in business classes.
Chuck Sykes has held an array of leadership roles in Tampa Bay business and development organizations, and served on the boards of numerous local institutions. He was co-leader of Tampa Bay Rays 2020, a nonprofit group of business leaders that in 2018 worked on recruiting business leaders to support a potential Rays move from St. Petersburg to Tampa.
“Chuck and John are two of the most important leaders we’ve had in Tampa in the last 20, 30 years,” Carlson said. “We should be so thankful as a community to have the opportunity to serve alongside them and thank them for all their contributions to the community.”
The combined company shifting its base from Tampa to Miami might sting on some level, said Frank Ghannadian, dean of the Sykes College of Business.
“It’s not going to affect employment or anything else like that, but it will affect the city,” Ghannadian said. “Just think about General Motors moving out of Detroit, what the effect of that would be. It will have some kind of effect of some kind. We want to attract headquarters of major companies to come to Tampa, because Tampa’s a great place for business.”
Company leaders have not yet decided what will become of the Sykes name and brand in Tampa, Himsworth said. Because the University of Tampa donations came from John and Susan Sykes, those names will not change.
“As we embark on the next phase of our journey, there is an opportunity to take the business to historic heights with a proven partner with similar culture and values,” Chuck Sykes stated. “In Sitel Group, I am confident that we have a valuable partner with a solid heritage of deep industry knowledge and experience, solid industry reputation, a shared vision and a people-first culture to better serve customers.”
As for what will be left in Tampa, Carlson sees opportunity, as executives who own lots of Sykes stock cash in.
“When these companies sell, typically there are a whole bunch of millionaires,” he said. “How many millionaires will be created out of the sale of Sykes? How many of them are here? And what will they do next? They’ll take their expertise and their money and either start businesses or invest in businesses.”