Polycom to terminate Mitel deal, agrees to superior $1.7-bn offer from Siris Capital

US video conferencing equipment maker Polycom Inc today said that it will terminate its three months merger deal with Canada's Mitel Networks Corp. and had instead agreed to be acquired by private equity firm Siris Capital Group for $1.7 billion.

The Siris Capital offer is subject to Polycom ending its existing merger pact with Ottawa-based Mitel and paying a termination fee of $60 million.

Siris has offered to pay $12.50 per share in cash for Polycom, a premium of 15-per cent to Polycom's closing price yesterday, and about 13.6 per cent above Mitel's closing share price on 7 July.

Siris has secured committed financing consisting of a combination of equity and debt. Equity financing will be provided by Siris and its co-investors from available capital commitments, and the debt financing will be provided by Macquarie Capital.

Siris has given Polycom shareholders until 15 July to accept its offer, subject to regulatory approvals.

Canadian technology company Mitel had in April offered to acquire Polycom for about $1.96 billion in cash and stock, and today said that it would not raise its offer for Polycom and waived its right to match Siris' offer.

''Polycom has a 25-year history serving the audio and video collaboration needs of the most demanding enterprises and is a globally recognized brand synonymous with innovation and the highest quality. We are very excited for the opportunity to partner with Polycom and its leadership team, as the Company fits well with Siris' investment focus on mission-critical telecommunications businesses,'' said Dan Moloney, Siris executive partner.

Founded in 1990, Polycom develops video, voice and content collaboration and communication technology.

The California-based company employs approximately 3,800 employees and has annual revenues of approximately $1.4 billion.