RE:RE:RE:Mitel to buy Aastra in $392-million cash, share offerTechnically, a buyout, but this is a merger; it is a bit surprising, and a bit of a lower premium for acquisition, but it does make perfect sense...economies of scale, operational synergies. The sum is more than the individual companies. Float will still be tight, high beta, so if she moves, she moves big. MNW management is exceptional, providing ROA of 27%+ annualized [at the top of the sector]...plus double digit annualized ROE. The management of the new company will likely be just as diligent, providing similar fundamental metrics going forward, imho.
I would have liked to see a straight paper deal, rather than cash distribution as this would have left about $90M in cash on the BS. However, I think the cash portion of the deal was likely a way to pay the insiders more than anything, without any divestitures by said once the M&A is completed. This deal will put about $17M cash into the hands of insiders, and the temptation by insiders to trim their positions will be mitigated. Also, no post acquisition glacial blocks of MNW on the offer side providing seemingly unending resistance.
Large R&D budget relative to revenue. Leveraged to European recovery...might be bad, but could be great, depending on Euro rates [just dropped] and how dovish EU fiscal & monetary policy will be going forward.
With the brothers holding strategic positions, particularly COO, this will prove to be an accretive acquisition... insider positions will remain strong. It will now be a stronger company; more worldly exposure [largest provider in Western Europe] with larger revenue growth potential. Cloud space has LARGE upside, particularly in relation to reducing operating expenses.
Given the all metrics, I can see MNW @ $14 within 18 months; I am curious to see some analyst coverage...should be interesting. I may trim my position, but still have to examine what other companies are better in the Tech sector.
To all reading, I wish you the best.
mrb