ShoreTel Inc (NASDAQ:SHOR)
ShoreTel Inc (NASDAQ:SHOR) is being acquired by Mitel Networks Corp (NASDAQ:MITL) for $7.50 per share in an “all cash” transaction that totals $530 million. The purchase price represents a 28% premium to yesterday’s closing share price of $5.85.
Don Joos, CEO of ShoreTel Inc (NASDAQ:SHOR), stated in a press release “With the announcement today, this concludes our comprehensive review of strategic alternatives by delivering a significant cash premium for our shareholders. Customers are clearly moving to the cloud at a rapid pace. The combination of Mitel and ShoreTel creates a new UCaaS market leader with a differentiated strategy and solution, and a clear migration path so that no customer is left behind or will have to abandon what they already have to cloud-enable their organization.”
Following the acquisition, Mitel will be well positioned to offer their customers cloud-based communications. For enterprise customers, ShoreTel Inc (NASDAQ:SHOR)’s solutions will strengthen Mitel’s ability to cloud-enable customers with technology that is needed for next-generation cloud applications.
Mitel will finance the acquisition using a combination of cash on hand from the combined businesses, its existing revolving credit facility, and proceeds from a new fully underwritten $300 million term loan maturing in 2023. BMO Capital Markets is leading the new term loan facility with Citizens Bank, N.A., HSBC Bank Canada and Canadian Imperial Bank of Commerce serving as Joint Lead Arrangers and Joint Bookrunners. Citizens Bank, N.A., lead on the existing amended facilities, will act as administrative agent for these and the new term loan.
As of noon, EST, MITL shares are up almost 5% on the deal news.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.