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. Now it appears that Polycom has had a huge change of heart.
Today private equity firm Siris Capital Group LLC said it has agreed to acquire Polycom for $2 billion in cash and take it 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?EU?s outstanding debt, Siris?EU? offer was 14 percent higher Mitel?EU?s bid, based on Mitel?EU?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?EU? offer to constitute a ?EU?Company Superior Proposal?EU? 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?EU?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 wouldn?EU?t lead to a superior offer. At that time, Polycom?EU?s board rejected Mitel?EU?s offer and declined to engage further, according to a May regulatory filing.
Founded in the early 1970s, Mitel was one of the companies to help jumpstart the growth of Canada?EU?s technology industry. Under founder and chairman Terry Matthews, Mitel applied software and microprocessor technology to telecommunications, later expanding into semiconductors and business communications.
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