Communication consolidation as Mitel acquires Polycom after pressure from activist investor
Canadian communication specialist Mitel has announced it is to acquire its American rival Polycom for $1.96bn (£1.4bn).
It is a cash-and-stock deal valued and will create a company with combined sales of $2.5bn and 7,700 employees.
The company will still be called Mitel and will remain headquartered in Canada, however under the terms of the deal the Polycom brand will be retained. There is no word on any redundancies.
Mitel’s CEO Richard McBee will lead the combined company, and Mitel CFO Steve Spooner, will also retain his role. Polycom directors will assume two seats on the Mitel board.
“Mitel has a simple vision – to provide seamless communications and collaboration to customers,” said Mitel CEO Rich McBee. “To bring that vision to life we are methodically putting the puzzle pieces in place to provide a seamless customer experience across any device and any environment.”
“Polycom is one of the most respected brands in the world and is synonymous with the high quality and innovative conference and video capabilities that are now the norm of everyday collaboration,” said McBee. “Together with industry-leading voice communications from Mitel, the combined company will have the talent and technology needed to truly deliver integrated solutions to businesses and service providers across enterprise, mobile and cloud environments.”
The new company will have an installed customer base in more than 82 percent of Fortune 500 companies.
The deal itself is expected to close in the third quarter of this year, subject to stockholder approval.
Mitel on the other hand is a communication specialist that is perhaps best known for its IP telephone solutions.
Both firms compete against the likes of Cisco and Avaya, and both had been under pressure from activist investor Elliott Management Corp to combine, according to the Wall Street Journal.
The two firms had reportedly been in talks for at least 10 months and the ‘merger’ comes at a time when the communications and collaboration industry is undergoing a period of intense change, thanks to the arrival of cheaper alternatives.
This changing landscape has seen many businesses move their legacy communication capabilities over to IP networks and cloud-based services that includes the likes of Microsoft-owned Skype for example.
Polycom was rocked in 2013 by the dramatic resignaiton of CEO Andrew Miller, after the discovery of “certain irregularities in Miller’s expense submissions.”
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