Mitel to purchase Mavenir for $560 million
Mitel Networks has signed a deal to acquire networking equipment provider Mavenir Systems in a cash and stock deal valued at approximately $560 million.
Mavenir will become the mobile business division of Mitel, still operating under the Mavenir brand. Its CEO Pardeep Kohli will join Mitel as president of Mavenir, reporting to Rich McBee.
Under the terms of the agreement, Mavenir’s shareholders will receive either all-cash or all-stock consideration for each share, with a value of $11.08 plus 0.675 of a Mitel common share, or $17.94 based on the closing price of a Mitel common share on February 27 2015.
"With wireless adoption of IP and 4G LTE and demand for next gen mobile services ramping quickly, we see a compelling opportunity to capitalise on a major market transition to add a high-growth mobile business to Mitel,” said Rich McBee, president and CEO of Mitel.
“We believe the combination of Mitel and Mavenir creates a powerful new value proposition for enterprises and mobile service providers, using a common IP technology layer as the foundation for convergence, growth and competitive differentiation.”
With the acquisition, Mitel expects to expand its total addressable market by approximately $14 billion by 2018.
The deal also extends Mitel's service provider and mobile operator footprint to over 130 service providers and mobile operators, covering 2 billion subscribers.