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
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 capitalized 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 recognized 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
"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
"Together, Polycom and Mitel expect to drive meaningful value for our shareholders, customers, partners and employees around the world," said
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
- #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
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
- Strong cash flow generation with pro forma 2015 EBITDA of approximately
- 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 millionby 2018, driven by supply chain optimization, facilities consolidation and economies of scale
Synergy Research Group, March 2016
MZA Limited, March 2016
Frost & Sullivan, Global Audio Conferencing Endpoints, November 2015
Synergy Research Group, September 2015
- Source: Q4 2015 UC Market Tracker - Telepresence Market Share Data Reports, February, 2016
Frost & Sullivan, Global Audio Conferencing Endpoints, November 2015
Each of Mitel's and Polycom's Boards of Directors have unanimously approved the transaction and are resolved to recommend that its shareholders vote in favor of the transaction. Mitel's directors and executive officers, as well as
The transaction is expected to close in the third quarter of this year, subject to stockholder approval by Polycom and Mitel, receipt of regulatory approval in certain jurisdictions and other customary closing conditions. Following the closing of the transaction, former Polycom shareholders are expected to hold approximately 60% and current Mitel shareholders are expected to hold approximately 40% of the outstanding Mitel common shares.
Mitel intends to finance the cash portion of the consideration for the acquisition, and the refinancing of its existing credit facilities and those of Polycom, using a combination of cash on hand from the combined business and proceeds from new financing and has received financing commitments from BofA Merrill Lynch of approximately
BofA Merrill Lynch is serving as Mitel's financial advisor, with
Morgan Stanley is serving as Polycom's financial advisor, with
Updated Guidance for Mitel First Quarter for the period ended
While Mitel is still early in the process of closing the quarter ended
Mitel's first quarter 2016 results are planned to be issued before the market opens on
Conference Call Information
Mitel and Polycom will host a joint conference call and webcast accompanied by slides today at
Live internet access for this call will be available through the Investor Relations section of Mitel's website at www.mitel.com.
Presentation slides will be available on
A rebroadcast of this call will be available on
No Offer or Solicitation
This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law.
Important Information for Investors
In connection with the proposed transaction between Mitel and Polycom, Mitel will file with the
Participants in the Merger Solicitation
Mitel, Polycom and certain of their respective directors, executive officers and employees may be considered participants in the solicitation of proxies in connection with the proposed transaction. Information regarding the persons who may, under the rules of the
Non-GAAP Financial Measures
In an effort to provide investors with additional information regarding the company's results as determined by generally accepted accounting principles (GAAP), the company also discusses, in its press releases and presentation materials, non-GAAP information which management believes provides useful information to investors, including Adjusted EBITDA, non-GAAP net income, non-GAAP operating expenses, non-GAAP Revenues and non-GAAP Gross Margin. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similar measures presented by other companies. We use these non-GAAP financial measures to assist management and investors in understanding our past financial performance and prospects for the future, including changes in our operating results, trends and marketplace performance, exclusive of unusual events or factors which do not directly affect what we consider to be our core operating performance. Non-GAAP measures are among the primary indicators management uses as a basis for our planning and forecasting of future periods. Investors are cautioned that non-GAAP financial measures should not be relied upon as a substitute for financial measures prepared in accordance with generally accepted accounting principles. Mitel provides a reconciliation between GAAP and non-GAAP financial information in our quarterly results announcements and in the supplemental slides used in conjunction with the company's quarterly calls. This information is available on our website at www.mitel.com under the "Investor Relations" section http://investor.mitel.com/events.cfm.
Forward Looking Statements
Some of the statements in this press release are forward-looking statements (or forward-looking information) within the meaning of applicable
Polycom helps organizations unleash the power of human collaboration. More than 400,000 companies and institutions worldwide defy distance with secure video, voice and content solutions from Polycom to increase productivity, speed time to market, provide better customer service, expand education and save lives. Polycom and its global partner ecosystem provide flexible collaboration solutions for any environment that deliver the best user experience, the broadest multi-vendor interoperability and unmatched investment protection. Visit www.Polycom.com or connect with us on Twitter, Facebook, and LinkedIn to learn more.
A global market leader in enterprise and mobile communications powering more than 2 billion business connections and 2 billion mobile subscribers every day, Mitel (Nasdaq:MITL) (TSX:MNW) helps businesses and mobile carriers connect, collaborate and provide innovative services to their customers. Our innovation and communications experts serve more than 60 million business users in more than 100 countries, and 130 mobile service providers including 15 of the top 20 mobile carriers in the world. That makes us unique, and the only company able to provide a bridge between enterprise and mobile customers. For more information, go to www.mitel.com and follow us on Twitter @Mitel.
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