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Acceptance of private equity firm’s higher offer will see conferencing specialist pay Mitel $60 million termination fee.
Polycom on Friday cancelled its merger deal with Mitel in favour of a rival bid from private equity firm Siris Capital.
The audio and video conferencing specialist agreed to be taken over by Mitel, an enterprise and mobile communications services provider, in April in a cash and stock deal worth US$1.96 billion. However, a month later it revealed it was courting a rival offer from an unnamed private equity firm.
Siris’ all-cash bid is worth $2 billion, and includes Polycom’s outstanding debt. It will be funded via a combination of equity and debt.
"The company fits well with Siris’ investment focus on mission-critical telecommunications businesses," said Dan Moloney, executive partner at Siris, in a statement.
"We believe that as an independent private company, Polycom would be best positioned to continue its heritage as a best-in-class communications solutions provider," he said.
As per the terms of its earlier agreement with Mitel, Polycom has agreed to pay it a $60 million termination fee.
"We feel it would not be in the best interest of Mitel shareholders to adjust the existing agreement," said Mitel CEO Rich McBee.
"While I am disappointed that this particular transaction will not move forward, I am confident in Mitel’s future as an industry leader and as a market consolidator. I wish our colleagues at Polycom, with whom we have worked closely for the past several months, ongoing success in the future," he said.
