Mitel Acquiring ShoreTel To Create A $1.3B UCaaS Powerhouse

In a move to become the second largest Unified Communications as a Service player in the market, Mitel struck a deal on Thursday to acquire ShoreTel for $530 million.

"This is a very natural combination that enables us to continue to consolidate the industry and take advantage of cost synergy opportunities while adding new technologies and significant cloud growth to our business," said Mitel CEO Rich McBee, in a statement. "Together, Mitel and ShoreTel will be able to take customers to the cloud faster with full-featured, cloud-based communications and applications."

Mitel and ShoreTel entered a definitive merger agreement in which Mitel will acquire 100 percent of the outstanding shares of ShoreTel common stock in an all-cash transaction, or a total equity value of approximately $530 million and a total enterprise value of approximately $430 million, according to a statement.

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The acquisition will give Mitel annual sales of $1.3 billion, according to Ottawa, Canada-based Mitel, and will double Mitel's UCassS revenue to $263 million.

The combined company will be headquartered in Ottawa and will operate as Mitel. The company will have approximately 3,200 channel partners and a broader communications and collaboration product portfolio. After the close, Mitel will have a global workforce of approximately 4,200 employees.

"Customers are clearly moving to the cloud at a rapid pace," said ShoreTel CEO Don Joos, in a statement. "The combination of Mitel and ShoreTel creates a new UCaaS market leader with a differentiated strategy and solution, and a clear migration path so that no customer is left behind or will have to abandon what they already have to cloud-enable their organization."

Mitel CEO McBee will lead the combined organization and Mitel CFO Steve Spooner will continue in that role.

The acquisition is expected to be completed in the third quarter of 2017.

In May, Mitel unveiled plans to acquire select UC assets and support contracts from Toshiba.