Combination creates a billion dollar company with a global installed base and the technology and scale to migrate those customers, and the broader market, to cloud based solutions.
The strategic move, designed to build scope and scale in a consolidating market, will create a billion dollar company with one of the largest global footprints in the industry, #1 market share in
The combined company will be headquartered in
"The business communications market is ripe for consolidation and on the cusp of a mass migration to cloud-based services. We believe that small competitors with narrow focus and limited global reach will quickly be marginalized," said
"Our two organizations are tightly aligned culturally and financially with little product, geographic or channel overlap" said
Expanded Geographic Footprint and Market Leadership
The combination of Mitel and
The combined company will provide channel partners and customers access to a broad portfolio that supports businesses of any size, from SMB to enterprise. With minimal channel overlap between the two organizations, the combination significantly expands the addressable market opportunities of existing partners, equipping them to sell into the small and mid-size business market in local or regional geographic opportunities as well as large and lucrative global enterprise accounts.
Enhanced Scale and Operating Leverage with Attractive Cash Flow Generation
Nearly doubling the stand-alone revenue of either company, the combination results in combined revenue for the new company of approximately
Terms of the Agreement
The transaction will be carried out by way of a court-approved plan of arrangement and will require the approval of at least 66 2/3% of the votes cast by the shareholders of
Under applicable TSX and NASDAQ rules, the transaction also requires the approval of Mitel shareholders by majority vote, as the number of Mitel common shares to be issued in the transaction exceeds 25% of the total number of outstanding Mitel common shares.
In addition to shareholder and court approvals, the transaction is subject to compliance with the Investment Canada Act and certain other closing conditions customary in transactions of this nature.
Further information regarding the transaction will be included in the management proxy circular expected to be mailed to
Mitel intends to finance the cash portion of the proposed transaction with cash on hand from the combined businesses. In conjunction with the transaction and to provide additional liquidity and working capital, Mitel currently intends to refinance its existing credit facilities and has received term loan and revolving credit facility commitments from
The transaction is subject to regulatory reviews, shareholder approval, and certain other customary conditions. Upon final approval and closing of the transaction, the common shares for the combined company will continue to be listed on both the
Mitel's fiscal 2014 second quarter results for the period ended
Conference Call Information
To access via tele-conference, please dial (888)401-4668. Participants dialing in from outside of
The Conference ID number for the live call and rebroadcast is 1586537.
Presentation slides will be available on
Live internet access and a replay for this call will be available through the Investor Relations section of Mitel's website at www.mitel.com.
A global market leader in business communications powering more than two billion business connections, helps businesses and service providers connect, collaborate and provide innovative services to their customers. Our innovation and communications experts serve more than 70 million business users in more than 100 countries. For more information, go to www.mitel.com and follow us on Twitter @Mitel.
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