Technology firm agrees $2bn acquisition to create merged company with $2.5bn revenue

 
William Turvill
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The new merged company would be based in Canada (Source: Getty)

Mitel has agreed a $1.96bn (£1.38bn) deal to acquire fellow technology company Polycom.

The deal would create a merged company with $2.5bn revenue and 7,700 employees.

Under the terms of the agreement, Polycom investors would be entitled to $3.12 and 1.31 Mitel common shares for each of their shares.

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The transaction is expected to close in the third quarter of 2016, subject to shareholder and regulatory approval.

The combined company will be headquartered in Ottawa, Canada, and operate under the Mitel name. However, the Polycom brand will be retained.

Mitel's chief executive Richard McBee and chief financial officer Steve Spooner will continue their roles, with Polycom directors assuming two seats on the board.

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The two company's 2015 sales totalled $2.5bn, with earnings before interest, taxation, depreciation and amortisation (Ebitda) of $350m. Synergy savings are expected to total $160m.

McBee said: "Polycom is one of the most respected brands in the world and is synonymous with the high quality and innovative conference and video capabilities that are now the norm of everyday collaboration.

“Together with industry-leading voice communications from Mitel, the combined company will have the talent and technology needed to truly deliver integrated solutions to businesses and service providers across enterprise, mobile and cloud environments."

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