Mitel Raises $135M

Mitel Networks closes a package consisting of equity investment, debt-to-equity conversion, and expansion of credit facilities

May 6, 2004

2 Min Read

OTTAWA -- Mitel Networks, a leading provider of business communications solutions, today announced the completion of a $135M financing package consisting of equity investment, debt to equity conversion and expansion of its credit facilities which significantly strengthens the Company's balance sheet and provides additional capital to finance growth plans.

EdgeStone Capital Partners, one of Canada's leading independent private capital managers, led the equity round with a $20M investment which underscores Mitel's achievements in the dynamic and rapidly growing market for IP Telephony. In addition to EdgeStone's investment, Mitel had previously raised over $50M of debt from its principal shareholder and other private investors, all of whom chose to convert their respective holdings into equity as part of this arrangement. This equity financing was augmented by new credit facilities that have more than doubled Mitel's available banking and credit facilities to approximately $65M.

"EdgeStone is excited to be participating in Mitel's strong growth prospects," said Gilbert S. Palter, EdgeStone's COO & Managing Partner. "IP Telephony has now unequivocally emerged as the next generation of telephony, and Mitel's outstanding products and services should enable it to continue to garner a significant market share, and become one of the industry leaders on a global scale." Guthrie Stewart, Partner at EdgeStone added: "A significant consideration for EdgeStone's investment is the strength of the management team led by Dr. Terry Matthews and Don Smith. Dr. Matthews is a brilliant visionary who made a major investment in IP Telephony to gain an early product advantage, and Don Smith and the entire Mitel team are doing a first rate job in executing Terry's vision."

"We are pleased to be Mitel's financial partner and to continue our credit support of the company as it expands its business; particularly its IP telephony solutions", said Kevin Malone, Managing Director, Investment & Corporate Banking, BMO Nesbitt Burns.

"Mitel has aggressively penetrated the global market for Enterprise IP Telephony, staying well ahead of the 30 per cent compound annual growth projections for the industry, and is increasing its market share," said Don Smith, CEO of Mitel. "We believe that the completion of the initiatives announced today not only substantiates Mitel's value proposition but also provides Mitel with the necessary resources to compete effectively in the global market. We fully anticipate that over the next few years we will continue to gain market share and further penetrate the IP Telephony market on a global basis."

CIBC World Markets acted as lead agent on the equity investment transaction.

Mitel Networks

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