Aastra have announced that they have entered into a definitive merge arrangement agreement with Mitel, unanimously approved by the Boards of Directors of both companies. Mitel will acquire all of Aastra’s outstanding common shares for US$6.52 in cash plus 3.6 Mitel common shares per each Aastra common share.
Using the Mitel closing common share price on November 8, 2013, and a CAD/USD exchange rate of 0.9531, this amounts to CAD$31.96 per Aastra common share, a total value on closing to Aastra shareholders of CAD$392M and represents a 20.9% premium to the 30-day volume weighted average price (VWAP) of Aastra common shares as of November 8, 2013.
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 Western Europe, a US$100 million cloud business, and a global installed customer base ready for upgrade as the US$18 billion business communications market prepares to migrate to software-based cloud services.
The combined company will be headquartered in Ottawa, Canada and will operate under the name Mitel while continuing to leverage Aastra’s strong brand recognition in select European markets. The executive management team will continue to be led by current Mitel President and Chief Executive Officer, Mr. Richard McBee.
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 Mr. McBee. “Aastra’s solid financial structure, complementary portfolios, geographic reach, and large installed-base immediately augment and expand Mitel’s market footprint, enabling us to capitalize on a unique opportunity to leap-frog the competition and lead the market.”
Reporting to Mr. McBee will be Chief Financial Officer, Mr. Steve Spooner, and Aastra’s Co-CEOs, Mr. Francis Shen, who will assume the position of Chief Strategy Officer, and Mr. Tony Shen, who will assume the position of Chief Operating Officer. Mitel will increase the number of directors on its Board from eight to nine. Two existing members of the Mitel Board will step down and Aastra will have the right to appoint three new board nominees to fill the vacancies.
Our two organizations are tightly aligned culturally and financially with little product, geographic or channel overlap” said Tony Shen. “We are stronger together, and combined we will be a major global player. We are confident that this merger will create value for our shareholders, customers, partners and employees,” added Francis Shen.
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