Mitel to buy Polycom for $2bn
Mitel is to buy phone and videoconferencing company Polycom for US$1.96 billion. The deal announced on Friday would create the biggest conference phone and business cloud communications company in the world.
The deal had been suggested by Elliott Management Corp investment group as far back as October, as it holds a 6.6% stake in Polycom and a 9.6% stake in Mitel and urged the two companies to explore a merger.
Mitel chief exec Richard McBee will lead the combined company, which will carry the Mitel name but retain Polycom's brand. The new company will have 7,700 employees around the world, with an annual revenue of $2.5 billion.
Mitel chief exec Richard McBee, who will retain his role, said in an interview that the deal had been on the company’s radar for three years and, although Polycom shareholders are expected to have about a 60% stake in the new company, "it had always been Mitel acquiring Polycom."
Polycom will be Mitel’s sixth acquisition in four years.
The transaction is expected to close in the third quarter. Two directors from Polycom are expected to stay on in the new company.
The deal is one of the biggest in UC&C, and follows Cisco's move in February to buy collaboration startup Acano for $700 million. IBM has also recently bought Ustream and Clearleap, both conferencing suppliers.