Mitel Networks to buy Aastra for C$392 million to expand in Europe

Mon Nov 11, 2013 1:18pm EST
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By Narottam Medhora

(Reuters) - Mitel Networks Corp (MITL.O: Quote) (MNW.TO: Quote), a provider of internet phone and video-conferencing services, said it would buy smaller rival Aastra Technologies Ltd AAH.TO 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.   Continued...