Mitel and fellow unified communications (UC) player Aastra have agreed to merge in a deal the companies said will make them a $1 billion global UC giant with a user base of more than 60 million.
Terms of the deal involve Mitel acquiring all outstanding Aastra shares for $6.52 in cash plus 3.6 Mitel shares for each Aastra share, according to the companies. This amounts to Mitel paying $31.96 Canadian dollars, or roughly $30.50, per Aastra common share, or about $374 million total.
The deal is slatted to close on Jan. 14, 2014, pending an Aastra and Mitel shareholder vote.
The combined Ottawa-based Mitel and Ontario-based Aastra will be valued at $1.1 billion, the companies said Monday, and will have a global customer base of more 60 million users. According to Mitel CEO Richard McBee, the deal will also allow Mitel to significantly expand its global footprint, given the strength of Aastra's brand in Latin America, Asia and especially Europe.
"The deal is all about creating scale," McBee told CRN. "It truly makes us a global player. We are very strong in North America, No. 3 in the market, and we [are] No. 1 in the U.K., but the reality is that after that it dropped off pretty quick."
Ben Treadway, president and CEO of Fulton Communications, a Roswell, Ga.-based solution provider and Mitel partner, said he was excited to see that the deal would give Mitel a bigger play globally because Fulton itself has been selling more to an international customer base.
"We sell to a lot of international customers with sites in the U.S. or sites in Europe," Treadway said. "I think [the Mitel-Aastra merger] will open up a bigger opportunity there, and make that an easier process."
McBee said the combined company, which will operate under the Mitel brand, will also have a cloud business valued at roughly $100 million.
Mitel has been steadily ramping up its own cloud offerings, announcing in September a new global sales unit dedicated to driving sales of its cloud-based UC suite. In March, Mitel unveiled a partnership with Sprint, through which Sprint now carries Mitel's hosted PBX solutions as part of the carrier's broader Cloud Wholesales Services portfolio.
"The combined cloud business is kind of an eye opener," McBee said. "[Aastra] has been doing really well, in terms of [cloud] seat counts and acquisitions and customer wins, ... and you didn't hear much about them, candidly. But you will."
McBee said Mitel and Aastra combined will have roughly 2,500 channel partners worldwide, and that there is minimal channel overlap between the two organizations. He noted that partners will benefit from an expanded product portfolio, spanning the low-end SMB space to the large enterprise, along with increased marketing funds, as a result of the deal.
"There will be more marketing dollars to be spent," McBee said.
McBee is serving as CEO of the combined organization, while Aastra's co-CEOs Francis Shen and Tony Shen will assume the positions of chief strategy office and chief operating officer, respectively. Mitel is also increasing the number of seats on its board of directors from eight to nine, and said two existing members will step down. Aastra will then appoint three new board members to those seats.
Aastra shareholders will own approximately 43 percent of the company.
PUBLISHED NOV. 11, 2013