Mitel Was Just Bought Out

[ralph]

On Tuesday, April 24, 2018, Mitel announced that it signed a definitive arrangement agreement to be acquired by an investor group led by affiliates of Searchlight Capital Partners, L.P. (“Searchlight”) in an all-cash transaction valued at approximately $2.0 billion, including Mitel’s net debt.

[Tech Electronics]

Ralph,

I believe this is just their way to get off of being a publically traded company and go back to being a privately held company.

Thanks,

TE

[acejavelin]

Yeah, if you read some of the news coverage on this, it seems to be a move to being a privately held company... All stockholders will be bought out and "Searchlight" will completely own Mitel.

[rotary dial tommy]

From past experience when ever a company like Mitel is taken over by an investment group the main goal is to sell the profitable portions and dump what remains . This starts with massive layoffs . I will be shocked if they try further development of Mitel products . Remember when Rolm corperation was purchased . The buyers flushed it down the toilet even though it was a well liked product .

[acejavelin]

Honestly though... Knowing Mitel's history, their recent purchases, and hearing some of the things the CFO has said in person, I really don't think that is the case here.

I would frankly be shocked if that was the intent... Mitel is literally one of the top 4 Unified Communications Service Providers in the world and is only growing, and aggressively so in both the CPE, hybrid, and hosted markets. I have a feeling this is a business move to take control away from shareholders and put it back into a management teams hands.

Although, with some of the things I have seen over the past few years, such as the fall of Avaya and the purchase of Broadsoft by Cisco, who knows what this could really mean?

[rotary dial tommy]

I think Search Capital will bring in Head Hunters first to slice off dead weight . Then start subbing out jobs to reduce payroll and benefits payments . I hope I'm wrong !, I went through the same thing in 1988 . Hundreds of people got layoff notices and subs where brought in a few weeks later . Those of us left where expected to train the subs , worse the head hunters followed us job to job .   

[Tech Electronics]

Guys,

I have to agree with acejavelin here. Mitel wasn't a very strong publically traded company and its stock prices showed that which made it harder for investors to jump on board. They had already been selling off parts of their company since 2006 as well to move forward with VoIP and UCaaS. If anything they will be selling off even more of their company to realize their goal, but that won't be right away unless those deals are already in the works to provide them with the capital they need to move forward with another plan.

When Mitel wanted to "merge" with Inter-Tel everyone knew it was the end of the line for the Inter-Tel company because when they went public it weakened their position within the market and its investors went against the original owners wishes for the sale of the company. With Mitel struggling with meeting its yearly projections I think they were looking at a possible avenue if other vendors, such as Cisco, to reduce their competition by a "merger"; much like Mitel had been doing the past few years.

Removing the need to post their yearly returns and projections gives Mitel a much stronger stance as no one would know where they are financially from this point forward; except Searchlight Capital. Now, what could happen is that the new "owners" may want to change out the upper management if they don't think they are doing a good enough job or upper management may have cut a deal for a good severance package and move on to retirement; who knows what happens behind closed doors.

In any instance I think the Mitel brand is going to remain within this market for some years to come, but no one really can predict future events can they.

Thanks,

TE

[ralph]

We still have 45 days for other bidders to try and outbid Seachlight.  Remember what happened when Mitel tried to buy Polycom?

Looking at their website, they list Rackspace as one of their assets.  That makes me wonder, with Mitel moving to the cloud, if that is a point of synergy that may boost the value of both companies.

Here's a fun "what if".
What if Cisco decided to buy it?
It's interesting to speculate what would happen then.

Ralph

[rotary dial tommy]

Back in the mid 1990's everyone in the corperation had to take a synergy class .I still do not know what it means . What is synergy ?

[acejavelin]

Back in the mid 1990's everyone in the corperation had to take a synergy class .I still do not know what it means . What is synergy ?

Synergy is the combining of two or more groups (such as companies for example) to produce a combined effect that is greater than the sum of their individual parts.

Take Mitel and add it to a group that has resources like Rackspace, Uniti, Electric Lightwave, various cable and broadband providers, and global reach into healthcare and retail markets, you could, in theory, create a "super" unified communications provider with a large network footprint.

[rotary dial tommy]

Thanks Acejavelin , so it's a touchy , feely thing .

[x-man]

Wonder how much Tel will make out of this this time....?

[johnp]

an investor group led by affiliates of Searchlight Capital Partners, this makes me wonder if Sir Terry might be part of the group

[ralph]

I work for one of his incubator companies.
I think if that were the case then I would have heard about it.
His investment group is Wesley Clover.

Ralph

[Boris]

Apparently there was some discussion between my Employer and Mitel on a call where Mitel is pushing to move towards Hosted Solutions within next 2 years.  Has anyone heard anything similar to that and any indication on how that affects vendors/certified techs?