This article is more than 1 year old

Mitel nabs Polycom in $1.96bn deal

Activist investor Elliott Management strikes again...

Elliott Management has struck again: Mitel has agreed to cough $1.96bn for bigger unified comms rival Polycom some months after the activist investor took a stake in both businesses and started the match-making.

The $23bn hedge fund took a 6.6 per cent stake in Polycom and 9.6 per cent in Mitel in October and was calling for the businesses to get hitched ever since.

Under the terms of the buy, Mitel will hand over $3.12 in cash and 1.31 Mitel common shares for each Polycom share, or $13.68 based on the closing price of Mitel’s shares on 13 April.

The expanded group will be headquartered in Canada – Mitel’s home country – and will operate under the Mitel name, though Polycom will still feature globally in parts of the portfolio.

Mitel CEO Richard McBee will run the enlarged organ, and CFO Steve Spooner will continue counting the beans. Two Polycom directors are expected to take a seat on the board.

The borg will employ 7,700 people, have run rate revenues of $2.5bn and claim to feature in the number one or two spot for business cloud comms, IP/PBX extensions in, er, just Europe, video conferencing and Open SIP seats.

Coming together might help ease the pressure on Polycom from arch rival Cisco and from freebies such as Skype.

In 2015, Polycom made a net profit of $68.9m on revenues of $1.26bn, compared to sales of $960.7m and net income of $42m in the previous year.

Over at Mitel, calendar year ’15 revenues were $1.15bn, up from $1.1bn in the prior fiscal, and a net loss of $20.7m versus a net loss of $7.3m. ®

More about

TIP US OFF

Send us news


Other stories you might like