Mitel to acquire Polycom for $1.96bn
Canada based Mitel and Polycom have announced that they have entered into a definitive merger agreement in which Mitel will acquire all of the outstanding shares of Polycom common stock in a cash and stock transaction valued at approximately $1.96 billion.
According to the statement, the transaction represented a 22% premium to Polycom shareholders based on Mitel’s and Polycom’s “unaffected” share prices as of April 5, 2016 and it is expected to close in the third quarter of 2016, subject to shareholder and regulatory approvals and other customary closing conditions.
The combined company will be headquartered in Ottawa, Canada, and will operate under the Mitel name while maintaining Polycom’s strong global brand. Richard McBee, Mitel’s Chief Executive Officer will lead the combined organization. Steve Spooner, Mitel’s Chief Financial Officer, will also continue in that role. On the closing of the proposed transaction, it is expected that Polycom will assume two seats on the Mitel board. Once merged, the combined company will have a global workforce of approximately 7,700 employees.
The combined company will have a significantly larger financial platform with the scope, scale and operating leverage needed to strategically expand in an actively evolving market. Financial highlights of the transaction include:
- Diverse revenue base with pro forma 2015 sales of approximately $2.5 billion
- Strong cash flow generation with pro forma 2015 EBITDA of approximately $350 million
- Strengthened balance sheet with Mitel’s pro forma 2015 net debt leverage reduced from 3.8x to 2.1x
- Expected to be accretive to Mitel shareholders in 2017
- Anticipated operating synergies of approximately $160 million by 2018, driven by supply chain optimization, facilities consolidation and economies of scale