Mitel Expects Acquisition Of Polycom To Be Accretive In 2017 And Generate Synergies In 2018

Mitel Networks Corporation MITL announced Friday it has entered into an agreement to acquire Polycom Inc PLCM in a deal which values the company at approximately $1.96 billion.

As part of the agreement, Polycom's shareholders will receive $3.12 in cash and 1.31 Mitel shares for each Polycom share they own, or $13.68 based on the closing price of Mitel's stock on April 13. The transaction implies a 22 percent premium to Polycom's shareholders based on the "unaffected" share price of both companies as of April 5.

Upon closure of the transaction, Polycom's directors will be granted 2 seats on Mitel's board.

The combination of both companies will create a new entity with a diverse revenue base with pro forma 2015 sales of approximately $2.5 billion. Mitel expects the deal to be accretive to shareholders in 2017 and can generate operating synergies of approximately $160 million by 2018.

"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 innovation to bring the workplace of the future to our customers."