Mitel buys rival and becomes super-company

1920s-telephone-advertComms vendor Mitel has acquired rival ShoreTel for $530 million to create a $1.3 billion company.

The deal, which consists of an all-cash transaction at a price of $7.50 per share, or a total equity value of around $530 million, represents a 28 percent premium on ShoreTel’s closing share price as of 26 July 2017. The deal is expected to close in the third quarter of this year.

Mitel claims the deal will make it the second largest unified communications as-a-service vendor in the market, doubling its revenues to $263 million.

The vendor also claims that the deal will make Mitel’s recurring revenue streams account for 39 percent of overall sales.

The combined entity will have around 3,200 channel partners and boast a global workforce of 4,200 employees.

Mitel CEO Rich McBee said: “This is a very natural combination that enables us to continue to consolidate the industry and take advantage of cost synergy opportunities while adding new technologies and significant cloud growth to our business. Together, Mitel and ShoreTel will be able to take customers to the cloud faster with full-featured, cloud-based communications and applications.”

Last year Mitel put in a $1.96 billion bid to buy videoconferencing vendor Polycom, but was snubbed months after when the firm was offered $2 billion by private equity firm Siris Capital.