Comms vendor Mitel has acquired rival ShoreTel for $530m to create a $1.3bn (£980m) turnover giant.
The deal, which consists of an all-cash transaction at a price of $7.50 per share, or a total equity value of around $530m, represents a 28 per cent premium on ShoreTel's closing share price as of 26 July 2017. The deal is expected to close in the third quarter of this year.
Mitel claims that the addition of ShoreTel will put the comms vendor as the second largest unified communications as-a-service vendor in the market, doubling its revenues to $263m, based on sales between March 2016 and March 2017.
The vendor also claims that the deal will make Mitel's recurring revenue streams account for 39 per cent of overall sales.
The combined entity will have around 3,200 channel partners and boast a global workforce of 4,200 employees.
"This is a very natural combination that enables us to continue to consolidate the industry and take advantage of cost synergy opportunities while adding new technologies and significant cloud growth to our business," said Mitel CEO Rich McBee.
"Together, Mitel and ShoreTel will be able to take customers to the cloud faster with full-featured, cloud-based communications and applications."
Mitel has had its fair share of bad luck in the M&A game. Last year Mitel put in a $1.96bn bid to buy videoconferencing vendor Polycom, but was snubbed months after when the firm was offered $2bn by private equity firm Siris Capital.
Nor is this the first time Mitel and ShoreTel have been engaged in M&A conversations. In October 2014, ShoreTel turned down Mitel's offer to acquire the company at $8.10 a-share. The following month, ShoreTel rejected yet another offer from the comms giant, this time at $8.50 a-share, describing the sum as "highly inadequate".
Today's deal between Mitel and ShoreTel at $7.50 a-share suggests a significant downgrade on the vendor's previous share valuation almost three years ago.
Mitel's deal comes after the comms vendor posted Q1 financial results ending 31 March which saw its losses widen from $12.9m to $19.7m year over year. Mitel also announced plans to trim 10 per cent of its workforce as part of cost reduction actions designed to save $30 a year.
The deal builds on distie's earlier promise to distribute a broader range of electrical goods
Services firm sees revenue increase 23 per cent
Execs Zak Virdi and Neil Lomax open up on the rationale behind acquisition
CEO Steve Brazier slams vendor titans at annual event in Barcelona