Mitel and Aastra in merger deal

Mitel and Aastra in merger deal

Mitel Networks, a provider of cloud and premises-based unified communication software solutions, has announced that it is to strike a merger deal with Aastra Technologies, which specialises in enterprise communications.

The agreement was confirmed after it was unanimously approved by the board of directors from both companies, and will see Mitel acquire all of the outstanding Aastra common shares for $6.52 in cash plus 3.6 Mitel common shares per each Aastra common share.

Going on Mitel's closing common share price on November 8th, this would value it at CAD$392 million, representing a 20.9 per cent premium to the 30-day volume weighted average of Aastra common shares.

The newly combined company's headquarters will be situated in Ottawa, Canada and will continue to operate under the name Mitel, although it will still leverage Aastra's strong presence in certain European markets.

It is hoped that the merger will allow both firms to build scope and scale in a consolidating market, while also creating a billion dollar company that will have one of the largest global footprints within the industry.

There is also a hope that the merged company will also be capable of the gaining the highest share of the market in Western Europe, creating a cloud business worth $100 million and a worldwide installed customer base that will suitable for upgrading, as the $18 billion business communications market prepares to move to cloud services.

The executive management team will continue to be led by Mitel's current president and chief executive Richard McBee.

He said: "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 marginalised.

"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."