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Mitel in Agreement to be Acquired by Searchlight Capital Partners for $2 Billion

Latest blockbuster deal re: Searchlight Capital Partners continues string of AV industry mega-mergers that started in early 2016 when Mitel wanted Polycom.

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Mitel in Agreement to be Acquired by Searchlight Capital Partners for $2 Billion

Two years ago, Mitel reached an agreement to acquire Polycom in a deal that was among the first AV industry mega-mergers in recent memory. That deal fell through, but now Mitel is on the other end of a blockbuster partnership, with Searchlight Capital Partners affiliates agreeing to acquire the company for $2 billion.

Under the terms of the agreement, Mitel shareholders will receive $11.15 per common share in cash once the deal is finalized.

This exceeds Mitel’s 52-week and last three-year-high price and represents a premium of approximately 24 percent to the 90-calendar-day volume-weighted average price of Mitel common shares through April 23, according to the announcement.

Upon completion of the transaction, Mitel will become a privately held company, which is expected to provide the company “with additional flexibility to accelerate its move-to-the-cloud strategy,” according to the joint press release with Searchlight Capital Partners.

“The Mitel Board of Directors has unanimously determined that the transaction is in the best interests of Mitel and fair to Mitel shareholders, and will recommend that Mitel shareholders approve the arrangement,” according to the announcement.

“Mitel has succeeded for 45 years because of persistent innovation and relentless focus on delivering shareholder value,” said Mitel co-founder and chairman Terry Matthews in the press release.

“Our board determined that this transaction, upon closing, will deliver immediate, significant and certain cash value to our shareholders. It also affirms the tremendous value and market leadership of Mitel. We believe this transaction will provide Mitel with additional flexibility as a private company to pursue the company’s move-to-the-cloud strategy.”

Searchlight Capital Partners Helping Mitel Head to the Cloud

Searchlight Capital Partners, a private investment firm with investments in North America and Europe, becomes the latest private equity firm to dip its toes into the AV integration space.

“This transaction is an exciting next step in our multi-year transformation that has enabled Mitel to emerge as an AV industry leader in the largest markets in the world,” said Mitel CEO Rich McBee in the announcement.

“As a private company, and with the strategic and capital support of the Searchlight funds, we will have greater flexibility to manage the transition in our market, accelerate our strategy, and drive the next phase of success for our customers, partners and employees.”

The deal is expected to close during the second half of 2018, subject to customary closing conditions, including receipt of shareholder, regulatory and court approvals.

The agreement includes a 45-day “go-shop” period, which permits Mitel’s board of directors and advisors to actively solicit, evaluate and potentially enter into negotiations with parties that make alternative acquisition proposals through June 7.

In April 2016, Mitel reached a deal with Polycom to acquire the videoconferencing company before Polycom balked at the deal to instead join Siris Capital Group through a merger with Triangle Private Holdings later that year.

Last month, Polycom was part of another AV industry mega-merger when it joined the Plantronics family in a $2 billion deal.

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