Mitel Networks Corp. (TSX:MNW) says it will sell its mobile division in a deal worth more than $385 million.
The Ottawa-based company says it will receive $350 million cash, a $35 million promissory note and an equity interest in Sierra Private Investments LP, which is buying the Mitel mobile division.
Mitel says cash from the sale will be used to pay down its credit facility and reduce its debt ratio.
It also expects to record a significant write-down of goodwill related to the transaction in the fourth quarter of 2016.
"In a period of rapid change and massive technology transitions, scale and focus are key to driving growth and shareholder return. This transaction will allow Mitel to achieve these goals," said Mitel CEO Rich McBee in a statement.
The move comes less than two years after Mitel paid $560 million to purchase software-based networking solutions provider Mavenir, which strengthened the Ottawa firm’s mobile offerings.
Mitel says the announcement follows a strategic decision to focus on expanding in its main market segment in cloud-based communications for enterprises.
– With files from OBJ staff