Mitel Acquired By Private Equity Firm for Unified Communications as a Service (UCaaS)
Mitel is being acquired by private equity dollars. An investor group led by affiliates of Searchlight Capital Partners will buy the company for $2 billion in cash, including Mitel’s net debt, the companies confirmed today.
The deal comes less than two months after Mitel announced a new global partner program and an overhauled go-to-market strategy. The effort consolidates and unifies the company’s partner program across regions starting in Q2 2018. It includes two-tier distribution and a heavy emphasis on unified communications and collaboration (UCC).
Mitel’s revenues hit $355.9 million in Q4 2017 — which was above consensus estimates, CEO Rich McABee said at the time. The company’s UCaaS subscriber base topped 1.1 million seats at the close of the year. Mitel’s Q1 2018 results are expected to surface May 3, 2018, but an associated investor call has been canceled amid the M&A deal.
Mitel itself has been in acquisition mode over the past two years or so. The company acquired ShoreTel for $530 million in July 2017, creating a $1.3 billion unified communications and cloud services business in the process. Mitel also purchased some Toshiba communications assets in May 2017. However, the company has also been left at the altar at least once. Indeed, Mitel tried and failed to buy Polycom in July 2016 for $2 billion.
Now, Searchlight is doing the buying. The deal is expected to close in the second half of 2018, at which time Mitel will become a privately held entity. Under the agreement, Mitel’s Board also has the freedom to actively solicit other potential buyers.
Searchlight, meanwhile, also owns a strategic stake in Rackspace.
Additional insights from Joe Panettieri.