December 19, 2016
Ottawa-based Mitel Corp. today announced that it has entered into a definitive agreement to divest its mobile division to the parent company of Xura, Inc. for US$350 million in cash, a US$35 million non-interest bearing promissory note and an equity interest in Sierra Private Investments L.P., the limited partnership that will own both Xura and the mobile division.
The cash portion of the purchase price is subject to adjustments for closing working capital and indebtedness.
The company said in a statement the move reflects a “strategic decision made during Mitel’s recent annual business review to refocus the company exclusively on the Unified Communications and Collaboration (UCC) market as digital transformation accelerates demand for cloud-based business communications solutions globally.
“In a period of rapid change and massive technology transitions, scale and focus are key to driving growth and shareholder return,” said Rich McBee, CEO of Mitel.
“This transaction will allow Mitel to achieve these goals. It also enables us to intensify our focus and capital in expanding our leadership position in the enterprise market as it prepares for large scale digital transformation of premise-based systems to the cloud. Employees and customers of the mobile division will benefit by being part of a large carrier-focused company with the size, scale and support infrastructure needed to truly compete for and drive the next wave of 4G/5G innovation.”
The sale of the division is expected to close in the first quarter of 2017, subject to obtaining necessary regulatory approvals and other customary closing conditions. The transaction is not subject to any financing condition.