Mitel launches $650 million term loan B at Libor plus 425-450 bps

By Sara Rosenberg

New York, March 31 – Mitel Networks Corp. launched on Tuesday its $650 million seven-year first-lien term loan B with price talk of Libor plus 425 basis points to 450 bps with a 1% Libor floor and an original issue discount of 99, according to a market source.

The term loan has 101 soft call protection for six months, the source said.

The company’s $700 million senior secured credit facility (Ba3/B+) also includes a $50 million five-year revolver.

Bank of America Merrill Lynch and Credit Suisse Securities (USA) LLC are the joint lead arrangers and bookrunners on the deal.

Commitments are due at noon ET on April 9, the source added.

Proceeds will be used with cash on hand to fund the acquisition of Mavenir Systems Inc. and refinance existing credit facilities at both companies.

Under the agreement, Mavenir stockholders are entitled to elect to receive either all-cash or all-stock consideration for each share of Mavenir common stock, subject to proration, in either case with a value of $11.08 plus 0.675 of a Mitel common share, or $17.94 based on the closing price of a Mitel common share on Feb. 27.

The cash and stock deal is valued at about $560 million.

Closing is expected in the second quarter, subject to the tender of a majority of Mavenir’s common stock, regulatory and stock exchange approvals and other customary conditions.

At closing, the net leverage ratio will be about 3.2 times trailing adjusted EBITDA with rapid deleveraging expected in the following year given expected strong cash flow generation.

Mitel is a Kanata, Ont.-based provider of cloud- and premises-based unified communications software solutions. Mavenir is a Richardson, Texas-based provider of software-based networking solutions for mobile carriers.

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