Polycom (PLCM) Ends Mitel Networks Takeover, Will Merge With Siris Capital LLC
Shares of Polycom Inc. (PLCM) were trading up +1.48 or +13.62 percent to $12.35 in Friday’s premarket after news early this morning that the company would be acquired by Siris Capital Group, ending a previous merger agreement with Mitel Networks Corp. Polycom Inc. stock closed at $10.87, unchanged from its previous closing price in Thursday’s regular trading session.
San Jose, California based Polycom Inc. was co-founded by two former employees of PictureTel Corp, Brian L.
New York City based Siris Capital Group, LLC was founded in 2011 and is a privately held private equity firm specializing in special situations, turnarounds, distressed assets and mid-market buyout investments in the telecommunications, healthcare, data and technology sectors. The company looks for investments in the $250 million to $2 billion range and has over $2.4 billion in cumulative capital commitments.
This morning, Siris Capital Group, LLC and Polycom, Inc. entered into a unilaterally binding agreement for Siris Capital to acquire all outstanding shares of Polycom Inc. for $12.50 per share in cash. With Polycom’s outstanding debt, the enterprise value of the transaction comes to approximately $2 billion.
The deal is contingent on Polycom terminating a previous merger agreement with Mitel Networks Corporation (MITL), which offered to buy Polycom for $1.96 billion on April 15th, 2016. Polycom’s board of directors determined that the Siris Capital offer was a “Company Superior Proposal” under the terms and agreement with Mitel.
This morning, Mitel Networks announced it had waived rights to match consideration or increase its offer to Polycom shareholders upon receiving notice from the Polycom board, and instead will receive a $60 million termination fee from Polycom concurrent with the termination of the agreement.
Once Mitel Networks receives the $60 million fee, which is expected later today, Polycom will enter into a merger agreement with Siris Capital with all outstanding common stock to be tendered to Siris Capital at $12.50 per share in cash, a +13.6 percent premium to Mitel’s current offer based on Polycom shares closing price on Thursday.
Dan Moloney, Siris Executive Partner stated in the company’s press release that, “The industry is transitioning to a hybrid on-premise and cloud-based Unified Communications environment. We believe that as an independent private company, Polycom would be best positioned to continue its heritage as a best-in-class communications solutions provider to more than 400,000 companies and institutions, channel partners, and the evolving Unified Communications ecosystem.”
Siris' offer will remain in effect until July 15th, 2016 and the transaction is still subject to the customary regulatory approvals, shareholder approval and other customary closing conditions. Siris has secured committed financing consisting of a combination of debt and equity with debt financing for the deal from Macquarie Capital.
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