MITEL NETWORKS CORPORATION (NASDAQ:MITL) Files An 8-K Entry into a Material Definitive Agreement

MITEL NETWORKS CORPORATION (NASDAQ:MITL) Files An 8-K Entry into a Material Definitive Agreement

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Entry into a Material Definitive Agreement.

On December18, 2016, Mitel Networks Corporation (Mitel),
Mitel US Holdings, Inc., a wholly owned subsidiary of Mitel (the
Seller) and Mitel Mobility Inc., a wholly owned subsidiary
of Mitel and the Seller (Mitel Mobility), entered into a
Stock Purchase Agreement (the Agreement) with Sierra
Private Holdings III LLC (the Buyer), and, solely for the
purposes of certain sections specified therein, Sierra Private
Investments, L.P. (Sierra Investments), to which Mitel has
agreed to divest its mobile division to the Buyer.

to and subject to the terms and conditions of the Agreement, the
Seller will sell, and the Buyer will purchase, all of the
outstanding shares of common stock of Mitel Mobility (the
Sale) for a purchase price consisting of $350 million in
cash, a $35 million promissory note (the Note) and equity
units in Sierra Investments (the Units). The cash portion
of the purchase price is subject to adjustments for cash,
transaction expenses, working capital and indebtedness. The Note
does not bear interest and matures on the earlier of (i)a
refinancing or replacement in full of Sierra Investments existing
credit facility and (ii)ten years from the closing of the Sale.
The Note is not secured or guaranteed by any other party. The
Note contains certain covenants, including a covenant that
prevents Sierra Investments and its subsidiaries from paying any
direct or indirect dividend or distribution to any equity holder
of Sierra Investments, other than certain tax distributions. The
Units represent a right to participate in future distributions of
Sierra Investments on a pro rata basis with other equity holders
of Sierra Investments, but that right to participate is only
effective after certain equity holders of Sierra Investments have
received distributions equivalent to a 8.5% internal rate of
return on their invested capital and is subject to a cap on
distributions of $125 million.

In order to finance the Buyers obligations under the Agreement,
the Buyer has secured committed debt and equity financing. The
availability of the debt and equity financing, however, is not a
condition to consummation of the Sale, and the Buyer will remain
subject to the obligations under the Agreement until the Sale is
consummated or the Agreement is terminated in accordance with its

The Sale is expected to close in the first quarter of 2017.
Consummation of the Sale is subject to customary closing
conditions, including, without limitation, (i)conditions
regarding the accuracy of representations and warranties and
material compliance by the parties with their respective
obligations under the Agreement, (ii)the absence of certain legal
prohibitions, (iii)the consent of all applicable governmental
authorities, (iv)receipt by the Buyer of release letters
reasonably acceptable to it with respect to the release of
certain liens contemplated under the Agreement, (v)transfer of
Mitels equity interests in Ranzure Networks, Inc.; (vi)the
amendment and restatement of the limited partnership agreement of
Sierra Investments as specified in the Agreement and the delivery
by the Seller to the Buyer of a joinder to such limited
partnership agreement; and (vii)the delivery of the Note and a
certificate representing the Units.

Each of Mitel, the Seller, Mitel Mobility, the Buyer and, to the
extent specified in the Agreement, Sierra Investments has made
customary representations and warranties and covenants in the
Agreement. Mitel has agreed to guarantee the agreements,
undertakings and other obligations of the Seller to the Buyer
under the Agreement. Each of Mitel and the Seller has agreed to
indemnify the Buyer and certain of its related persons for any
losses resulting from a breach by Mitel or the Seller of its
representations, warranties and covenants contained in the
Agreement, subject to certain limitations described in the
Agreement. Buyer has agreed to indemnify the Seller and certain
of its related persons for any losses resulting from a breach by
the Buyer of its representations, warranties and covenants
contained in the Agreement, subject to certain limitations
described in the Agreement.

The Agreement contains certain termination rights for the Seller,
Mitel, the Buyer and Sierra Investments, including the right of
each party to terminate the Agreement if the Sale has not been
consummated on or prior to April18, 2017.

The Buyer will be required to pay a reverse termination fee to
the Seller in the amount of $35 million if the Agreement is
validly terminated by Mitel or the Seller because (A)there has
been a material violation, breach or inaccuracy of any
representation, warranty, agreement or covenant of the Buyer or
Sierra Investments contained in the Agreement which would cause
the conditions precedent to the obligations of the Seller and
Mitel regarding the


accuracy of the representations and warranties of the Buyer and
the material compliance by the Buyer with its obligations under
the Agreement not to be satisfied and such violation, breach or
inaccuracy has not been waived or cured as specified in the
Agreement or (B)the Buyer fails to consummate the Sale by the
date required under the Agreement, provided that the conditions
precedent to the obligations of the Buyer have been satisfied or
waived and the Seller has irrevocably confirmed in writing that
the conditions precedent to the obligations of the Seller and
Mitel have been satisfied or waived and the Seller is ready,
willing and able to consummate the Sale at the time of

The foregoing description of the Agreement and the Sale
contemplated thereby does not purport to be complete and is
subject to, and qualified in its entirety by reference to, the
full text of the Agreement, which is attached hereto as Exhibit
2.1 and is incorporated herein by reference.

The representations, warranties and covenants contained in the
Agreement were made solely for the purpose of the Agreement and
solely for the benefit of the parties to the Agreement and:

should not be treated as categorical statements of fact, but
rather as a way of allocating the risk to one of the parties
if those statements prove to be inaccurate;
may have been qualified in the Agreement by disclosures that
were made to the other party in connection with the
negotiation of the Agreement;
may apply contractual standards of materiality that are
different from materiality under applicable securities laws;
were made only as of the date of the Agreement or such other
date or dates as may be specified in the Agreement; and
may not be relied upon by any person other than Mitel, the
Seller, Mitel Mobility, the Buyer and Sierra Investments.
Item 9.01. Financial Statements and Exhibits.

(d) Exhibits


Exhibit Name
2.1* Stock Purchase Agreement dated as of December 18, 2016.

* Schedules and Exhibits have been omitted to Item601(b)(2) of
Regulation S-K. The registrant hereby agrees to supplementally
furnish to the SEC upon request any omitted schedule or exhibit
to the Agreement.

Forward Looking Statements

Some of the statements in this Current Report on Form 8-K are
forward-looking statements (or forward-looking information)
within the meaning of applicable U.S. and Canadian securities
laws. These include statements using the words believe, target,
outlook, may, will, should, could, estimate, continue, expect,
intend, plan, predict, potential, project and anticipate, and
similar statements which do not describe the present or provide
information about the past. There is no guarantee that the
expected events or expected results will actually occur. Such
statements reflect the current views of management of Mitel and
are subject to a number of risks and uncertainties. These
statements are based on many assumptions and factors, including
general economic and market conditions, industry conditions,
operational and other factors. Any changes in these assumptions
or other factors could cause actual results to differ materially
from current expectations. All forward-looking statements
attributable to Mitel, or persons acting on its behalf, are
expressly qualified in their entirety by the cautionary
statements set forth in this paragraph. Undue


reliance should not be placed on such statements. In addition,
material risks that could cause actual results to differ from
forward-looking statements include: the ability to recognize the
anticipated benefits from the transaction (including repayment of
the Note and the receipt of any distributions on the Units); the
ability to obtain required regulatory approvals for the
transaction and the timing of obtaining such approvals; the risk
that the conditions to the transaction are not satisfied on a
timely basis or at all and the failure of the transaction to
close for any other reason; risks associated with the non-cash
consideration to be received by Mitel; the impact to Mitels
business that could result from the announcement of the
transaction; the anticipated size of the markets and continued
demand for Mitel products and services; access to available
financing on a timely basis and on reasonable terms; Mitels
ability to achieve or sustain profitability in the future;
fluctuations in quarterly and annual revenues and operating
results; fluctuations in foreign exchange rates; current and
ongoing global economic instability, political unrest and related
sanctions; intense competition; reliance on channel partners for
a significant component of sales; dependence upon a small number
of outside contract manufacturers to manufacture products; and,
Mitels ability to successfully implement and achieve its business
strategies, including its growth of the company through
acquisitions and the integration of recently acquired businesses
and realization of synergies. Additional risks are described
under the heading Risk Factors in Mitels Annual Report on Form
10-K for the year ended December31, 2015 and in Mitels Quarterly
Report on Form 10-Q for the quarter ended September30, 2016 filed
with the U.S. Securities and Exchange Commission and Canadian
securities regulatory authorities on February29, 2016 and
November3, 2016, respectively. Forward-looking statements speak
only as of the date they are made. Except as required by law,
Mitel has no intention or obligation to update or to publicly
announce the results of any revisions to any of the
forward-looking statements to reflect actual results, future
events or developments, changes in assumptions or changes in
other factors affecting the forward-looking statements.



Mitel Networks Corporation is a provider of business communications and collaboration software, services and solutions. The Company operates through three segments: Enterprise, Cloud and Mobile. The Enterprise segment sells and supports products and services for premise-based customers. The Cloud segment sells and supports products that are deployed in a cloud environment. The Mobile segment sells and supports software-based telecommunications networking solutions that enable mobile service providers to deliver IP-based voice, video, rich communications and enhanced messaging services to their subscribers. The Company’s product portfolio includes premises and cloud-based enterprise communications infrastructure products and solutions, unified communications and collaboration (UCC) and contact center applications and a range of service offerings.


MITEL NETWORKS CORPORATION (NASDAQ:MITL) closed its last trading session up +0.20 at 6.69 with 189,201 shares trading hands.

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