Mitel Networks releases details on proposed $300 million term loan

By Sara Rosenberg

New York, July 28 – Mitel Networks Corp. expects that its planned incremental $300 million covenant-light six-year term loan will be priced at Libor plus 425 basis points if corporate ratings are B2/B and Libor plus 500 bps if ratings are lower than B2/B, according to the commitment letter filed in an 8-K with the Securities and Exchange Commission on Friday.

The term loan is expected to have a 1% Libor floor and amortization of 1% per annum.

BMO Capital Markets, Citizens Bank, HSBC Bank and CIBC are the joint lead arrangers and bookrunners on the deal, with BMO the left lead. Citizens Bank is the administrative agent.

The new term loan is anticipated to come to market sometime after Labor Day.

Proceeds will be used with cash on hand and revolving credit facility borrowings to help fund the acquisition of ShoreTel for $7.50 per share, or a total equity value of about $530 million and a total enterprise value of around $430 million.

The company’s existing term loan and revolver will remain in place, and majority consent has already been received for certain amendments which accommodate the acquisition and the incremental financing.

Closing is expected in the third quarter, subject to ShoreTel stockholders having tendered shares representing more than 50% of the outstanding shares of ShoreTel common stock, receipt of regulatory approvals and other customary conditions.

Mitel is an Ottawa-based provider of communications software solutions. ShoreTel is a Sunnyvale, Calif.-based provider of communication solutions.

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