The deal creates a company with increased scale, strengthening Mitel's position in the European market and preparing the two companies for the shift to cloud services. The combined company will be headquartered in Ottawa, Canada and will operate under the name Mitel while continuing to leverage Aastra's brand in select European markets. The new company has pro forma sales of USD 1.1 billion per year, and the group expects synergies of USD 45 million per year within two years, driven by supply chain optimization, facilities consolidation and economies of scale.
Mitel CEO Richard McBee will lead the group. Aastra' s co-CEOs Francis Shen and Tony Shen will serve as respectively Chief Strategy Officer and Chief Operating Officer, and they have already committed their combined 14 percent stake in the company to the takeover bid. Aastra will have the right to appoint three members of the nine-member board. Aastra shareholders, who will own approximately 43 percent of the combined company, will need to approve the deal at a meeting in January, and holders of 63 percent of Mitel's shares have already agreed to back the offer at the shareholder vote.
Aastra and Mitel anticipate that the transaction will be completed in the first quarter of 2014. Mitel will finance the deal with cash on hand. In addition, the company intends to refinance its existing credit facilities and has received term loan and revolving credit facility commitments from Jefferies Finance and Toronto-Dominion Bank of up to USD 405 million.
