IBM to sell its customer care business to Synnex

An employee installs a computer at the booth of IBM during preparations at the CeBit computer fair in Hanover, March, 4, 2013. REUTERS/Fabian Bimmer

(Reuters) - IBM IBM.N said on Tuesday it will sell its customer-care outsourcing business to Synnex Corp SNX.N for $505 million.

Synnex will pay $430 million in cash and $75 million in company stock, giving IBM a stake in Synnex, IBM said in a statement.

In 2012 the business, which includes contact centers, generated $1.3 billion of revenue, which is over 1.0 percent of IBM’s total revenue.

IBM said it expects to have a total pre-tax gain on the sale of between $125 million and $175 million.

The transaction, which is part of IBM’s strategy to sell low-margin businesses, is expected to close in the coming months.

Reporting By Nicola Leske