Wheelings & Dealings: Mitel & Mavenir Make Nine-Figure Merger Deal
March 02, 2015
Recently, word emerged of a major new deal in the business communications space, as two fairly major names—Mitel and Mavenir Systems (News - Alert)—got together on the strength of a merger agreement. The two firms in question—who made the announcement earlier today—announced said merger agreement in what was said to be a bid to drive efforts in the enterprise unified communications (UC) sector as well as the mobile Internet protocol (IP) UC market.
The merger agreement called for Mitel (News - Alert) to acquire all outstanding shares of Mavenir Systems stock, in which Mavenir stockholders will be able to get either an all-cash or all-stock payment in exchange for current Mavenir common stock. The agreement called for the value to be $11.08 plus 0.675 Mitel common shares, or an outright $17.64 payment, as based on the price of a share of Mitel common stock on February 27, 2015. The total value of the deal itself is said to be around $560 million. When the transaction concludes, reports suggest, Mavenir will be Mitel's mobile business division, but work under the well-known brand Mavenir.
But it's not so much about the numbers as it is about the motivations behind said deal. It's well-known that mobile networks are going increasingly LTE (News - Alert), and many carriers are in turn starting to migrate all available services—from voice to text and beyond—to an all-IP model. That means a lot of improved efficiencies—no more using two sources of transmission—and a lot of opportunities for businesses to get in on this newfound action.
Mavenir is already working with over 130 mobile customers—as well as 15 of the top 20 mobile carriers on Earth—and is famed for offering up several mobile-market firsts, like the first deployment of voice over Wi-Fi (VoWiFi) with T-Mobile (News - Alert) and the first live network deployment of voice over LTE (VoLTE), according to reports. Mitel is out to be a major force in mobile communications. It's already offering up connections for a host of firms daily—over two billion connections daily, and over 33 million cloud connections daily—so this latest move to bring in Mavenir simply works to cement that perception. Plus, reports suggest that Mitel expects to expand its total market by nearly $14 billion by 2018, and be in a better position to move in a market that's already expanding in Mitel's direction.
The combination of these two firms should open up a lot of new opportunities in a market that's fairly clamoring for new tools to bring out. It wasn't so long ago that AT&T (News - Alert)'s CEO was projecting a mobile network that was all data, and tools like VoLTE are going to go a long way in bringing these projections to pass. With Mitel and Mavenir working together, meanwhile, two major names in the field have a better opportunity to bring together the various offerings and create some new syntheses, products that should have a significant impact on the market. Only time, of course, will tell just what Mitel and Mavenir can bring to the field as a result of this merger, but it's a safe bet that two companies who understand the mobile market as these two do should be able to offer up some impressive new developments.
Edited by Maurice Nagle
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