Mitel Networks Corp. will acquire Aastra Technologies Ltd. in a stock and cash deal valued at about $400 million, the two telecom equipment companies announced Monday.
If approved, the friendly deal will result in Aastra shareholders owning about 43 per cent of an enlarged Mitel, to be headquartered in Ottawa.
The combined company would have about $1.1 billion US of total revenue, with a global customer base and an opportunity to tap into demand for equipment that supports cloud computing.
They're also aiming to reduce combined operating costs by $45 million US over two years, by consolidating facilities, optimizing their supply chains and benefiting from economies of scale.
"The business communications market is ripe for consolidation and on the cusp of a mass migration to cloud-based services. We believe that small competitors with narrow focus and limited global reach will quickly be marginalized," said Mitel CEO Richard McBee.
"Aastra's solid financial structure, complementary portfolios, geographic reach, and large installed-base immediately augment and expand Mitel's market footprint, enabling us to capitalize on a unique opportunity to leap-frog the competition and lead the market."
Under the deal, Aastra shareholders will receive about $31.96 per common share, mostly in Mitel stock plus $6.52 US per share in cash.
Mitel is one of Canada's veteran technology companies, currently focused on unified communications technology for the business sector.
Aastra, based near Toronto in Concord, Ont., primarily makes communications equipment for the business sector.