Mitel acquired by Roots owner Searchlight Capital for $2 billion, will go private

Ottawa-based Mitel Networks Corp. has been acquired by London-based Searchlight Capital Partners for $2 billion.

The cash transaction was announced on Tuesday and will see Mitel be taken off the public stock exchanges and become a private company. The acquisition comes less than two years after Mitel was foiled in its intent buy rival enterprise communications firm Polycom for $1.96 billion. That deal was killed when another private equity firm, Siris Capital, offered $2 billion in cash for Polycom.

Mitel shareholders should be pleased with yesterday’s announcement. In the days prior to the deal, Mitel’s stock hovered just above $10 per share, but this acquisition will pay out $11.15 per share in cash. Mitel notes it’s about 24 per cent higher than the 90-day average of the share price.

The 45-year-old Mitel has built its business on IP communications in the enterprise space. In recent years its moved on from selling PBX boxes to voice over IP (VoIP) solutions and collaboration software. It has no shortage of competitors in the space, including Cisco Systems and Avaya in the enterprise solutions space. It also faces a barrage of competition in the software collaboration space including from Microsoft, Facebook, and Slack.

Searchlight operates offices in London, New York, and Toronto. Specializing in equity and debt acquisition, its no stranger to enterprise IT vendors, having previously invested in cloud computing firm Rackspace. It’s also a familiar player in Canadian markets, having acquired apparel retailer Roots in 2015 and taking it to an initial public offering last year.

Mitel completed some acquisitions of its own in 2017, acquiring unified communications vendor ShoreTel in July for $430 million. It also acquired Toshiba’s unified communications business. Mitel CEO Rich McBee said at the time that Mitel’s strategy was to consolidate the market around unified communications as a service and assist clients with digital transformation efforts.

The deal comes with a 45-day “go-shop period” that opens up the possibility the acquisition could be disrupted if a better offer comes along by June 7.

 

Would you recommend this article?

Share

Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.


Jim Love, Chief Content Officer, IT World Canada

Featured Download

Brian Jackson
Brian Jacksonhttp://www.itbusiness.ca
Editorial director of IT World Canada. Covering technology as it applies to business users. Multiple COPA award winner and now judge. Paddles a canoe as much as possible.

Featured Story

How the CTO can Maintain Cloud Momentum Across the Enterprise

Embracing cloud is easy for some individuals. But embedding widespread cloud adoption at the enterprise level is...

Related Tech News

Get ITBusiness Delivered

Our experienced team of journalists brings you engaging content targeted to IT professionals and line-of-business executives delivered directly to your inbox.

Featured Tech Jobs