Robbins LLP: Acquisition of Mavenir Systems, Inc. (MVNR) by Mitel Networks Corporation (MITL) May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of Mavenir Systems, Inc. (NYSE: MVNR) by Mitel Networks Corporation (NASDAQ: MITL). On March 2, 2015, the two companies announced the signing of a definitive merger agreement pursuant to which Mitel Networks will acquire Mavenir. Under the terms of the agreement, Mavenir shareholders will receive the equivalent of $17.94 in cash or stock for each share of Mavenir common stock.
Is the Proposed Acquisition Best for Mavenir and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at Mavenir is undertaking a fair process to obtain maximum value and adequately compensate its shareholders.
As an initial matter, the $17.94 merger consideration represents a premium of only 19.8% based on Mavenir’s closing price on February 23, 2015. This premium is significantly below the average one-week premium of nearly 32.6% for comparable transactions within the past five years. In addition, the $17.94 merger consideration is significantly below the target price of $24.00 set by an analyst at Cowen and Company on February 27, 2015. Further, Mavenir traded above the offer price at $18.78 on March 25, 2014.
On February 26, 2015, Mavenir reported strong earnings results for its fourth quarter 2014. In particular, Mavenir, reported total revenue of $33.7 million for the fourth quarter, an increase of 24% year-over-year. Additionally, Mavenir has beat consensus analyst estimates for adjusted EPS, adjusted net income, and sales in three out of its last four quarters. In commenting on these results, Mavenir President and Chief Executive Officer Pardeep Kohli remarked, “Mavenir delivered another strong year with solid financial results, resulting from the rapid adoption of 4G LTE and the launches of services such as VoWi-Fi and VoLTE in 2014. We are well positioned to capitalize on 4G LTE adoption and NFV/SDN, two trends that will continue to be some of the key growth drivers for our business in 2015. In addition, Mavenir continues to build our capabilities in next-generation solutions to deliver growth and enhanced shareholder value.”
In light of these facts, Robbins LLP is examining Mavenir’s board of directors’ decision to sell the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
Mavenir shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
Mavenir shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.
