Mitel (Nasdaq: MITL) has agreed to purchaseÂ Polycom (Nasdaq: PLCM) for approximately $1.96 billion in cash and stock as both companies seek to establish a business that will offer communications and collaboration systems to enterprise customers.
BothÂ companies expect to close the acquisition in the third quarter of 2016 and create a combined businessÂ with $2.5 billion in fiscal year 2015 pro forma revenue, Mitel and Polycom said Friday.
Mitel CEO Richard McBee and Steve Spooner, chief financial officer at Mitel, will both serve in their same positions at theÂ combinedÂ company upon the deal’s closure.
The combined company will trade under the name of Mitel, be based in Ottawa, Canada and have approximatelyÂ 7, 700 employees worldwide.
MitelÂ will pursue growth opportunities in cloud-based business communications, conference phones, audio, Internet Protocol/private branch exchange, open Session Initiation Protocol and video conferencing markets.
For every share in Polycom that company’s stockholders have, they will receive 1.31 shares in Mitel and a cash payment of $3.12 per share.
The transaction is subject to approvals of Polycom and Mitel shareholders as well as of regulatory agencies.
Bank of America Merrill LynchÂ andÂ Morgan StanleyÂ respectively served as financial advisers of Mitel and Polycom in the transaction.