Mitel Networks To Acquire Polycom In $1.96 Bln Cash

(RTTNews) - Mitel Networks Corp. (MITL, MNW.TO) Friday said it has agreed to acquire Polycom Inc. (PLCM) in a cash and stock transaction valued at around $1.96 billion.

As per the definitive agreement, Polycom stockholders will be entitled to $3.12 in cash and 1.31 Mitel common shares for each share of Polycom common stock, or $13.68 based on the closing price of a Mitel common share on April 13. The transaction represented a 22 percent premium to Polycom shareholders based on Mitel's and Polycom's "unaffected" share prices as of April 5.

The combination is expected to leverage Mitel's position as a global communications with Polycom's portfolio in the conference and video collaboration market. The combined company will be headquartered in Ottawa, Canada, and will operate under the Mitel name.

Once merged, the combined company will have a global workforce of approximately 7,700 employees. The deal is expected to close in the third quarter of 2016.

Richard McBee, chief executive officer of Mitel will lead the combined organization and its CFO Steve Spooner continue in that role. Polycom directors will assume two seats on the Mitel board.

Mitel intends to finance the cash portion of the consideration for the acquisition, and the refinancing of its existing credit facilities. It has received financing commitments from BofA Merrill Lynch of approximately $1.1 billion in the aggregate.

Looking ahead, Mitel confirmed that its first quarter revenue and adjusted EBITDA margin will be within its prior guidance range. Mitel now expects quarterly non-GAAP revenue will be in the range of $270 million to $280 million and adjusted EBITDA margin will be in the range of 7.5 to 9.5 percent. The combined company will have a diverse revenue base with pro forma 2015 sales of around $2.5 billion.