Post ShoreTel Buy, Mitel Goes Private in $2 Billion Sale

… the speed at which it can execute, and going private can be instrumental for this purpose. The company has a number of assets that place it in a good position to maintain a top spot in the communications and collaboration space, including an extensive market footprint and the CPaaS assets that came with the acquisition of ShoreTel.”

451 Research’s Raul Castanon-Martinez

Making the numbers to keep investors happy on a quarterly basis while undergoing a major transformation with a long-term view are two things that tend to be mutually exclusive, Castanon-Martinez noted.

“Going private should take the pressure off and give Mitel more room to maneuver and swiftly execute on its long-term strategy,” he said.

Jon Arnold, principal analyst at J Arnold & Associates, said Mitel’s growth potential is limited in that it’s not going to catch the market leaders — Cisco, Microsoft and even Avaya — while it should be able to continue to fend off RingCentral, Vonage and 8×8. However, going private does provide more options for accessing capital, which could be used to make a big acquisition, he said.

“And you also have to consider Searchlight,” he said. “They may have their own plans for building up a footprint in this space, and their own ideas of how a company like Mitel might fit into their broader portfolio, and might want to fit into companies more focused on artificial intelligence (AI), for example, or some global markets, or tied to carriers.”

Mitel’s board of directors unanimously agreed the transaction is in the best interests of the company, and will recommend that shareholders approve the arrangement.

Searchlight, a private investment firm with investments in North America and Europe, seeks out partnerships for its funds with leading corporations and businesses in which their capital and strategic support can enhance value.

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