Mitel announces definitive agreement to acquire Polycom
Combines global technology leaders to create a complete communications and collaboration portfolio and an enhanced ability to deliver profitable growth
• Creates new $2.5 billion revenue company with scale and differentiated portfolio to expand in evolving enterprise communications market
• Delivers attractive value for Mitel and Polycom’s shareholders with significant operating leverage and synergy opportunities
• Polycom brand to be retained
• Results in a significant reduction in net debt leverage ratio
• Transaction expected to be accretive to Mitel in 2017
Mitel (Nasdaq: MITL) (TSX: MNW) and Polycom (Nasdaq: PLCM), today 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. Under the terms of the 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, 2016. 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.
New company with shared vision for seamless communications and collaboration
The communications and collaboration industry is undergoing a period of intense change that is rapidly redrawing the competitive landscape and breaking down barriers between previously discrete markets and technology domains. Through a series of strategic acquisitions, Mitel has successfully capitalised on changing market dynamics and transformed the company to help customers operate more efficiently and cost effectively. The combination of Mitel and Polycom will create a new industry leader leveraging Mitel’s recognised leadership as a pioneer in global communications with Polycom’s well-known premium brand and industry-leading portfolio in the conference and video collaboration market.
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 organisation. 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.
“Mitel has a simple vision - to provide seamless communications and collaboration to customers. To bring that vision to life we are methodically putting the puzzle pieces in place to provide a seamless customer experience across any device and any environment,” said Mitel CEO Rich McBee. “Polycom is one of the most respected brands in the world and is synonymous with the high quality and innovative conference and video capabilities that are now the norm of everyday collaboration. Together with industry-leading voice communications from Mitel, the combined company will have the talent and technology needed to truly deliver integrated solutions to businesses and service providers across enterprise, mobile and cloud environments.”
“Together, Polycom and Mitel expect to drive meaningful value for our shareholders, customers, partners and employees around the world,” said Peter Leav, President and CEO of Polycom. “We look forward to working closely with the Mitel team to ensure a smooth transition and continued
Global scale and strategic scope provide key customer benefits
The combined global company will offer customers an integrated technology experience supported by an impressive ecosystem of partners. Key market positions include:
• #1 in business cloud communications (i)
• #1 in IP/PBX extensions in Europe (ii)
• #1 in conference phones (iii)
• #1 in Open SIP sets (iv)
• #2 in video conferencing (v)
• #2 in installed audio (vi)
• Installed customer base in more than 82% of Fortune 500 companies
• Deep product integration with Microsoft solutions
• Mobile deployments in 47 of the world’s top 50 economies
• Combined portfolio of more than 2,100 patents and more than 500 patents pending
• Global presence across five continents with approximately 7,700 employees worldwide
• # อันดับ 1 ด้านระบบสื่อสารคลาวด์สำหรับธุรกิจ
• # อันดับ 1 ด้านระบบ IP/PBX ในยุโรป
Enhanced platform expected to deliver profitable growth with opportunities for synergies and significant debt deleveraging. 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 optimisation, facilities consolidation and economies of scale
