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Analysts, Intelisys Weigh In on Mitel’s Polycom Acquisition

Video Conference

Mitel effectively is doubling its business by acquiring Polycom for the moderate price of $1.96 billion in cash and stock.

That’s according to Brenon Daly, research director of financials at 451 Research. He and other industry analysts, as well as master agent Intelisys, had various reactions to Friday’s announcement of the deal.

Execs say the combined company will leverage Mitel’s global communications business to advance Polycom’s conference and video collaboration portfolio.

Daly said Mitel is buying a company that’s struggling to demonstrate any growth. Also, the acquisition is a “three-quarters stock deal, so this is not Mitel paying cash.”{ad}

“This is basically a straight-up consolidation,” he said. “This is much more about cost cutting and removing duplicate costs from the combined business. Right now we’re in that part of the M&A cycle where consolidation plays out. It’s not the speculative acquisitions. We are in the late days of the current M&A cycle.”

Diane Myers, IHS’s research director for VoIP, UC and IMS, said communications and collaboration is an increasingly tight market in terms of sales and opportunity growth, and “with the number of vendors in this market, there has to be consolidation.”

Intelisys' Andrew PryfoglePolycom’s two primary businesses are video, which Mitel has not had, and IP phone, where there is overlap between the two companies, she said. The IP phone business could prove challenging for Mitel because many of Polycom’s customers in this area compete with Mitel and “they may not want to work with a competitor versus going with another third party,” she said.

Andrew Pryfogle, Intelisys’ senior vice president of cloud transformation, said Polycom has been a leader in the SIP endpoint and video space for a long time. Most UCaaS providers have standardized on their devices, he said.

“However, Mitel is a competitive service provider to all those other UCaaS players,” he said. “It will be fascinating to see if those providers stick with Polycom/Mitel or if companies like Yealink, Grandstream and snom will stand to gain big share. The pace of consolidation is certainly picking up. I expect many more deals in the coming months.”

“Mitel is certainly on a tear with acquisitions, starting with prairieFyre and Aastra Technologies in 2013, wireless infrastructure provider Mavenir Systems in 2015 and now Polycom,” said industry analyst and Channel Partners contributor Michael Finneran. “Mavenir was a bit of a surprise as it was a little outside of Mitel’s orbit, but the rest are close adjacencies. Polycom is the biggest target by far and will give Mitel the No. 2 position in videoconferencing behind Cisco. With Aastra and Polycom, Mitel will now be a major supplier of Microsoft Skype for Business endpoints.”


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