A couple years after an unsuccessful bid to acquire ShoreTel, Mitel has apparently now succeeded. The Canadian-based business voice provider has entered into a definitive merger agreement to acquire ShoreTel for $7.50 per share, which is a 28% premium to yesterday's closing price.
Combined, the two will take over the #2 spot in the UCaaS marketplace, where they will have revenues of $263M. The total workforce will be about 4,200 worldwide. Geographically, adding ShoreTel's business to will boost Mitel's penetration in North America significantly and taking the overall size of that business above what is generated in EMEA.
In the quarter ended on March 31, 2017, ShoreTel earned $0.01 per diluted share in non-GAAP income on $87.73M in revenue, while Mitel earned $0.09 in non-GAAP income from $223.1M. The deal envisions some $60M in annual synergies.
The deal will cost Mitel some $430M in cash, which they will pay for out of cash on hand, an existing credit facility, and a new $300M term loan due 2023 that they already have arranged. If all goes well, the deal will be completed by the end of this quarter.
The previous bid that ShoreTel rejected back in 2014 is said to have been a bit higher, at $8.10 per share.