* Deal for C$392 mln
* To pay C$31.96 per Aastra share, a 13 pct premium to
Aastra's Friday close
* Aastra shares rise as much as 18 pct
* Aastra to nominate three new members to Mitel's board
By Narottam Medhora
Nov 11 Mitel Networks Corp , a
provider of internet phone and video-conferencing services, said
it would buy smaller rival Aastra Technologies Ltd for
C$392 million ($374 million) to expand in Europe.
Mitel's offer of $6.52 in cash plus 3.6 of its shares per
Aastra share values Aastra at C$31.96 per share -- a premium of
13 percent to the stock's Friday close.
Aastra's shares were up 12 percent at C$31.75 in afternoon
trade on Monday. They rose as much as 18 percent to C$33.32
earlier in the session.
The deal will double Mitel's revenue, giving the combined
company revenue of about $1.1 billion, with 54 percent coming
from Europe, Middle East and Africa, according to a presentation
posted on Mitel's website.
Mitel is also in talks with a UK-based telephone services
provider and is looking to tie up with European carriers to
provide cloud-based and telecommunication services, Chief
Executive Richard McBee told Reuters.
He declined to provide any further details.
McBee said there is a tremendous opportunity to transition
customers in Europe to cloud-based services from a virtual
private network platforms.
"(The European) market place is significantly behind the
North American market in terms of transition," he said.
Canadian business software maker Open Text Corp
said last week that it would buy a privately held cloud
services company for $1.17 billion.
The deal with Aastra is expected to add to Mitel's earnings
within the first year, Steve Spooner, Mitel's chief financial
officer, said on the call.
Mitel said it would increase the number of directors on its
board to nine from eight. Two members of its board will step
down and Aastra will nominate three new members, it said.
Jefferies LLC is the financial adviser to Mitel, while TD
Securities Inc is advising Aastra.
Osler, Hoskin and Harcourt LLP is Mitel's legal counsel,
while Tetrault LLP is Aastra's counsel.
Mitel shares were up about 1 percent at $6.74 in afternoon
trade on the Nasdaq. The stock was up under 1 percent at C$7.12
on the Toronto Stock Exchange.