Mitel Ends Bid for Polycom After Competitor Offers $2 Billion Deal
Polycom will now be bought by private equity firm Siris Capital, which wants to keep the company an independent player in a rapidly-changing market.Mitel officials have dropped their $1.96 billion proposal to buy Polycom after declining to raise their bid after a private equity firm offered $2 billion for the video conferencing technology vendor. Mitel President and CEO Rich McBee said he is disappointed, but that boosting its offer for Polycom wouldn't make sense for Mitel or its investors. "The agreement announced on April 15 resulted from a detailed due diligence and negotiation process that we feel accurately determined fair value for Polycom," McBee said in a statement. "We feel it would not be in the best interest of Mitel shareholders to adjust the existing agreement." Polycom officials said in a statement that the company's board of directors had decided to end the acquisition agreement with Polycom after determining that private equity firm Siris Capital's $2 billion offer—made July 7—was superior to Mitel's. Polycom will pay Mitel a $60 million termination fee.
The decisions by Polycom and Mitel end the pursuit of a deal which began in October 2015, when activist investor Elliott Management raised its stakes in both companies and urged their merger, saying it would benefit both shareholders and customers and make a combined company a more competitive player in a rapidly changing enterprise communications space. A merged Mitel and Polycom would have had $2.4 billion in revenue and about 7,700 employees operating in 47 of the world's 50 largest economies. The installed customer base would include more than 82 percent of the Fortune 500 companies, and the merger would have made the company the world's fourth-largest collaboration technology vendor, behind Cisco Systems, Microsoft and Avaya.