In a statement issued today, Ottawa, Canada-based Mitel Networks Corp had agreed to purchase Aastra Technologies Ltd in a definitive agreement. Mitel would be acquiring its smaller rival for CAD392 million or USD374 million. Both of the companies' board of directors had given their unanimous approval to the strategic acquisition.
The acquisition price represented the total value of Aastra's shares at Friday's close, which was at a 13% premium. Aastra closed at CAD31.96 per share on the Toronto Stock Exchange.
Under the terms of the definitive agreement, Mitel would be paying USD6.52 and give up 3.6 of its own shares to acquire one Aastra share. The multi-payment transaction would be equivalent to the agreed price of CAD31.96 per share.
According to a joint statement by both companies, the combination would allow the new company to have a reach of more than 60 million end users in over 100 countries. Mitel and Aastra also said the combination would create a global network for the new company of over 2,500 distributors. The combined company would also generate USD.1 billion in yearly revenue, said Mitel and Aastra.
As a result of the acquisition, Mitel would be increasing the number of its board directors from eight to nine. Asstra would also have the option to nominate three new members as two of Mitel's board directors would be stepping down, the companies both said.
Mitel President and Chief Executive Officer, Mr. Richard McBee said about the new company, "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. 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."
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