Jefferies, Others Lead Facilities for Mitel, Aastra Merger
Mitel Networks Corp. announced it completed its merger with Aastra Technologies Ltd. In conjunction with the closing of the merger, Mitel completed financing of a $405 million credit facility consisting of a $355 million term loan maturing in January 2020 and an undrawn $50 million revolving credit facility maturing in January 2019.
Jefferies Finance LLC and The Toronto-Dominion Bank were joint lead arrangers and joint bookrunning managers for the new credit facilities. Jefferies LLC acted as financial advisor to Mitel in connection with the merger and financing arrangements and TD Securities Inc. acted as financial advisor to Aastra.
Proceeds were used to finance the merger of Aastra and repay $259 million outstanding under the existing credit facilities, as well as fees and expenses related to the transactions.
The $355 million term loan is priced at LIBOR, plus 4.25% with a LIBOR floor of 1.00%. The undrawn $50 million revolving credit facility is priced at LIBOR, plus 4.25%.
“We are pleased to have secured new credit facilities on these very favorable terms, which significantly reduces our annual interest cost and enhances our operating flexibility,” said Steve Spooner, CFO, Mitel. “Our new capital structure, combined with the enhanced cash flow generation we expect from the merger, positions Mitel with one of the best financial platforms in the industry.”
The company anticipates approximately $50 million of run rate synergies within two and a half years, driven by supply chain optimization, facilities consolidation and economies of scale. With the merger completed, Mitel expects the combined cash-flow will allow for ongoing debt repayment and is expected to provide Mitel liquidity and flexibility to aggressively pursue growth opportunities.
With $1.1 billion of combined annual revenue and 60 million customers worldwide, Mitel now has one of the largest global footprints in the industry and is driving consolidation in the $18 billion business communications market.
Mitel acquired all of the issued and outstanding Aastra common shares. Under the terms of the arrangement, shareholders of Aastra received $6.52 in cash plus 3.6 common shares of Mitel for each Aastra common share held. The total amount of cash paid by Mitel was approximately $80 million and the number of Mitel Shares issued was 44,162,509. Mitel financed the cash consideration of the transaction from cash on hand and from a portion of the proceeds from the new credit facility as discussed above.
Mitel is a global provider of business communications.