Mitel Pulls the Trigger to Acquire Polycom

Apr 15, 2016

Mitel and Polycom announced a deal for the former to acquire the latter.

Agreement highlights:

  • Mitel will acquire all of the outstanding shares of Polycom common stock in a cash and stock transaction valued at approximately $1.96 billion.
  • The combined company will be headquartered in Ottawa, Canada, and will operate under the Mitel name while maintaining Polycom’s strong global brand as a separate business unit.
  • Richard McBee, Mitel CEO will lead the combined organization, with Steve Spooner, Mitel CFO, also continuing in his role for the combined company.
  • On transaction’s closing, Polycom is expected to assume two seats on the Mitel board.
  • The combined company will have a global workforce of approximately 7,700 employees.  
  • The deal is expected to close in Q3 2016, with the transaction accretive to Mitel in 2017.
  • With Mitel’s run rate of $1.2 Billion and Polycom’s $1.3 Billion, the combined company is expected to generate $2.5 Billion in annual revenues.

Analysis – Synergies Each Entity Brings to the Combined Company



Track record of successful M&A transactions

Comprehensive video conferencing tech portfolio

Strong financial position

Solid video content management solutions

Comprehensive UC portfolio, including call control

Comprehensive pro & managed video conferencing services portfolio

Established cloud UC solutions & momentum (1.9 million cloud seats)

Established presence in Asia-Pacific

Strong and differentiated mobility technology

Leadership in the open SIP handset & tabletop audio conferencing endpoint markets

Established SMB & mid-market presence (channels, installed base)

Established presence in the enterprise sector (channels, installed base)

Competitive contact center that integrates with Mitel, Microsoft &   other UC solutions

Microsoft preferred voice & video endpoint provider

The combined company is expected to have greater global reach, in terms of channel, customer base and technology ecosystem. The combination will give Polycom access to call control technology that it has lacked when competing against Cisco, while arming Mitel with video and multimedia communications and collaboration solutions to create a key differentiator against competing voice-centric UC providers. Polycom constituents will also benefit from Mitel's proven cloud development and delivery prowess. Additionally, the acquisition offers Mitel additional inroads into Microsoft Skype for Business accounts, given Polycom's strong connections with Microsoft in the voice endpoints and video arenas.

As with most mergers of this size there are, however, many questions and unknowns in the early stages. There appears to be significant overlap in the combined portfolio of Mitel and Polycom phones.  Its assumed that Mitel will focus the development direction of its phone lineup for optimizations with its various call control platforms. At the same time, Polycom will likely continue its phone development focus on open SIP sets for support across a range of third-party voice systems, as well as its lineup of voice endpoints tailored for Skype for Business environments.

At an organizational execution level, certain things are unclear at this early juncture. While Mitel's CEO and CFO will lead combined company, it's unclear who will fill other executive leadership roles of the combined organization (i.e., CMO, CIO, CTO, etc.).  That said, such issues are expected to take time to address, and there is indeed time to handle them.

Mitel has a proven track record of successfully integrated acquired companies and organizations since 2007 (i.e., Inter-Tel in 2007, prairieFyre in 2013, Aastra in 2014, Oaisys in 2014, Mavenir in 2015, etc.).  Several of these have been strategic, with Mitel acquiring to round out its portfolio or target adjacent opportunities (i.e., prarieFyre for contact center, Oaisys for call recording, and Mavenir for mobility), while others have been to expand market share and global reach (i.e., Inter-Tel and Aastra). The majority of these were $500 Million acquisitions, several of which each nearly doubled Mitel revenues at the time of their respective transaction closings. The Polycom purchase appears to be foremost a strategic technology acquisition to Mitel's portfolio, while also a merger of companies with similar revenues and the largest that Mitel has attempted to date. However it remains to be seen if the combined company can pull it off and begin to accelerate growth on the new opportunities.


Robert Arnold


Sixteen + years of experience in enterprise communications markets. Particular expertise in: Competitive and market intelligence, Market trend analysis and forecasting, Solutions development, marketing, sales and service support strategies.

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