Mitel Networks Corp. (Nasdaq: MITL) agreed to buy Polycom Inc. (Nasdaq: PLCM) for cash and stock in a deal valued at about $1.96 billion to expand in the market for conferencing and video collaboration.

Polycom stockholders will be entitled to $3.12 in cash and 1.31 Mitel common shares for each common share of Polycom. That’s $13.68, based on the closing price of Mitel on April 13, the company said in a statement. The price represents an 11 percent premium compared with Polycom’s close of $12.27 on Thursday in New York.

The combined company will have annual sales of about $2.5 billion, be headquartered in Ottawa, and will operate under the Mitel name while maintaining Polycom’s global brand. They both provide communications networks, software and other products for businesses. Bloomberg first reported news of talks between the companies on April 5. In another similar recent deal, technology focused private equity firm Siris Capital Group LLC took Premiere Global Services Inc. (NYSE: PGI) private.

Activist investor Elliott Management Corp. said on Oct. 8 it had taken stakes of about $100 million in both Polycom and Mitel and urged them to combine. Elliott said the companies face intense competition from larger rivals such as Huawei Technology Co. and Cisco Systems Inc. and should acquire peers to increase market share.

Shares in San Jose, California-based Polycom rose 3.5 percent on Thursday in New York. The purchase price represents a 22 percent premium to Polycom’s share prices as of April 5, before the stock was affected by reports of a deal, the companies said. Mitel, based in Kanata, Ontario, fell 2.2 percent to $7.88 on Thursday and has a market value of about $952 million.

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