Three months ago, after 10 months of negotiations, Canadian tech giant Mitel Networks Corp. announced that it would buy video conferencing solutions provider Polycom Inc. for close to $1.9 billion. Núna, it appears that Polycom has had a huge change of heart.
Í dag, private equity firm Siris Capital Group LLC said it has agreed to acquire Polycom for $2 billion in cash and take the company private. Previously, the plan was to consolidate the enterprise communications businesses of Mitel and Polycom.
The deal depends on Polycom cancelling its deal with Mitel, which Siris and Polycom said has already been done. Taking into account Polycom’s outstanding debt, Siris’ offer was 14 percent higher Mitel’s bid, based on Mitel’s closing share price as of July 7, according to a statement released by Polycom.
“Polycom has informed Siris that its Board of Directors has unanimously determined Siris’ offer to constitute a ‘Company Superior Proposal’ under the terms of its merger agreement with Mitel,” according to the statement. “Polycom has also announced its intention to terminate promptly its merger agreement with Mitel, subject to the terms thereof.” Polycom’s market cap as of this morning is around $1.47 billion.
Polycom received the offer from Siris about a month after it announced the Mitel merger. At that time, Mitel expressed confidence that the Siris proposal would not lead to a superior offer. Upphaflega, according to a May regulatory filing, Polycom’s board rejected the offer and declined to engage further. But then, the tables turned in Siris’ favor.
One aspect of Siris’ offer that Polycom might have found appealing is that it will keep the video and voice conferencing company as an independent operation. There could also be added opportunity for Polycom as part of the portfolio of other telecom interests owned by Siris.
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