Mitel’s Polycom Deal Preempted

July 8th, 2016 by · 1 Comment

One of the bigger cloud communications deals of the year is apparently falling apart this week.  In a release this morning, Mitel revealed that its previously announced purchase of Polycom has hit a bit of a snag, and will probably not happen.  It seems Polycom has received a new offer.

Mitel agreed to purchase Polycom for about $1.96B in cash and stock back in April in a deal that would have created an entity with $2.5B revenue and $350M in EBITDA before expected synergies of $160M.  The transaction had been proceeding normally, and closing would likely have been on schedule in August.  But it was always a bit of on odd pairing to me.

Now Polycom has received a better offer, and Mitel has chosen not to match it — so perhaps they weren’t that gung-ho on the deal either.  If they follow through, Polycom will pay Mitel a $60M termination fee and follow that new path.

So who is the new bidder?  An SEC filing from May indicates an unnamed private equity player that had previously been bidding for Polycom had made a new bid and in June it sweetened it further to $12.25 per share in cash to take the company private — and it’s possible that bid was further modified since.  It definitely didn’t come out of the blue, as ‘Sponsor 1’ is all over the filings for the past year.  I presume we’ll know who that PE firm is in the coming days.


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Categories: Cloud Computing · Mergers and Acquisitions · VoIP

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