The Bull Case For Mavenir Systems
Ben Axler • 22 Comments
Ben Axler • 22 Comments
Apr. 29, 2015, 1:11 PM
- Mitel's (NASDAQ:MITL) acquisition of carrier VoLTE software provider Mavenir (MVNR) is on the books. As previously announced, Mavenir investors will receive either a mixture of cash/stock worth $17.55/share or 1.83 Mitel shares for each share they own.
- Along with the announcement, Mitel states it has closed on a $710M credit facility that features a $660M term loan sporting an interest rate of LIBOR + 4%. Mitel has used the facility's proceeds to "finance the acquisition of Mavenir, repay the approximately US$280.2 million outstanding under Mitel's existing credit facilities and to repay the approximately US$27.3 million outstanding under Mavenir's existing credit facilities."
- Mitel has sold off following the announcement; its Q1 report arrives on May 7. Mavenir issued a Q1 warning on April 10.
Mar. 2, 2015, 6:10 AM
- Mitel (NASDAQ:MITL) will acquire Mavenir (NYSE:MVNR) for cash and stock worth $17.94/share based on Friday's close - a 23% premium.
- For Mitel, which primarily serves the enterprise with UC (unified communications), the deal expands its footprint to more than 130 service providers and mobile operators, including 15 of the top 20 mobile operators worldwide. It says acquiring the VoLTE and RCS pioneer will expand its total addressable market by approximately $14B by 2018. (LightReading)
- A webcast, at 8:30 AM ET, can be heard here.
- Here are the presentation slides
- Note: On Jan. 13, SA author Ben Axler recommended Mavenir as his top long idea for 2015 and beyond.
Jan. 13, 2015, 11:15 AM
- Mavenir (NYSE:MVNR) is acquiring telecom signaling software vendor Ulticom from P-E firm Platinum Equity for an undisclosed sum. The deal is expected to be closed by month's end.
- Mavenir notes Ulticom's offerings for the fast-growing Diameter signaling market (driven by 4G network upgrades) have been deployed by ten tier-one carriers. It also calls Ulticom's products "competitively well-positioned" for network functions virtualization (NFV) deployments, and praises the company's "deep channel relationships." Sonus and F5 also compete in the Diameter signaling market.
- Along with the acquisition, Mavenir has reiterated Q4 revenue guidance of $33.5M-$35M, but cut gross margin guidance to 55.5%-58% from 58.5%-62.5%.
- The company blames postponed purchases of two high-margin capacity expansions. Q4 op. profit guidance has been lowered to -$3.8M to -$5.4M from -$1.4M to $0.3M. Full Q4 results arrive on Feb. 26.
- With Ulticom in tow, Mavenir is guiding for Q1 revenue of $39M-$43M and EPS of -$0.08 to -$0.17, and 2015 revenue of $185M-$195M and EPS of $0.28-$0.36. The 2015 consensus (excludes the acquisition, naturally) was at $159.3M and -$0.12 going into today.