Mitel Networks to launch $405 million credit facility on Tuesday

By Sara Rosenberg

New York, Jan. 3 - Mitel Networks Corp. set a bank meeting for Tuesday to launch its proposed $405 million senior secured credit facility, according to a market source.

Jefferies Finance LLC and TD Securities (USA) LLC are the joint lead arrangers and bookrunners on the deal.

Based on filings with the Securities and Exchange Commission, it is expected that the facility will include a $355 million six-year term loan and a $50 million five-year revolver.

The filings outlined expected pricing on the tranches at Libor plus 500 basis points, with the term loan having a 1% Libor floor, 101 soft call protection for six months and amortization of 1% per annum.

The revolver is anticipated to have a 50 bps unused fee.

Official price talk on the deal is not yet available.

Proceeds will be used to help fund the acquisition of Aastra Technologies Ltd. for $6.52 in cash plus 3.6 Mitel common shares per each Aastra common share and to refinance an existing credit facility.

Aastra shareholders will own around 43% of the combined company.

The combined company is expected to have $1.1 billion in diversified annual sales, about $45 million of run rate synergies within two years and strong free cash flow generation.

Closing is targeted for this quarter, subject to Aastra shareholder approval, court approval, compliance with the Investment Canada Act and other customary conditions.

Mitel is a Kanata, Ont.-based provider of cloud- and premises-based unified communications software solutions. Aastra is a Concord, Ont.-based enterprise communications company.

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