Mitel, Avaya Merger on Tap?Mitel, Avaya Merger on Tap?
On the heels of word that Avaya is close to reaching acquisition deal, the focus turns to Mitel and a reported bid of $20 per share.
August 19, 2019
During Avaya's third-quarter 2019 earnings call last week, Avaya CEO Jim Chirico shared that the company expects to finalize its next-step strategic plan “within the next 30 days.” Now a week later, word has resurfaced that Mitel is an interested buyer.”
Speculation regarding Mitel’s interest first came up four months ago, in a report published in The Wall Street Journal that Avaya and Mitel were discussing a merger. At the time, which followed Chirico’s earlier acknowledgment that Avaya had engaged J.P. Morgan to evaluate options for how to best maximize shareholder value, he proposal had the potential transaction — a stock deal — valued at about $2 billion, or about $20 to $22 a share.
Bloomberg yesterday reported, citing information gleaned from “people with knowledge of the matter,” that Mitel has submitted an offer for Avaya that “it believes would value the combined business at more than $20 per share.” The purchase, should it become a reality, could create a single entity worth more than $5 billion, including debt, Bloomberg reported.
According to Bloomberg’s sources, the deal Mitel has carved out would place one-third ownership in the hands of its investors. The combined company would be publicly traded, one source told Bloomberg, and Mitel’s private equity owner Searchlight Capital “expects synergies of at least $250 million a year from the deal.”
Watch this space for additional coverage on what an Avaya-Mitel merger would mean for the industry, including the contact center market.
