Mitel Networks readies launch of new term loan for Sept. 7

By Sara Rosenberg

New York, Aug. 30 – Mitel Networks Corp. set a lender meeting for 10 a.m. ET on Sept. 7 to launch a new term loan, according to a market source.

Based on the commitment letter filed with the Securities and Exchange Commission, the debt is expected to be a $300 million covenant-light six-year term loan 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, with a 1% Libor floor.

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.

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.

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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