In a $723 Million transaction two of the leaders in the mid-market communications space have teamed up as Mitel has just acquired Inter-Tel. Both companies were very strong players in the mid-size PBX space and both were leaders in staying ahead of the technology curve
Going back to the days of CTI over a decade ago, Mitel and Inter-Tel are established players in IP communications and unified communications.
“We believe this is an outstanding transaction for our stakeholders,” said Inter-Tel CEO Norman Stout. “Mitel and Inter-Tel have state-of-the-art products and complementary channels to market. In particular, we are excited about the opportunities this partnership represents for Inter-Tel’s associates and partners, who we believe will benefit from being part of a larger, growing and dynamic organization that can compete more effectively in the marketplace. We look forward to working with the Mitel team to ensure a rapid and seamless transition.”
The combined company, including Inter-Tel international subsidiaries such as Inter-Tel Europe, Swan Solutions and Lake Communications, will have solutions to address the needs of very small to large businesses globally. It will have market coverage in over 90 countries and customers in industries such as finance, healthcare, hospitality, retail, government and education.
“Having rapidly achieved the next step in our long-term growth plans with this merger, we will for the near-term, withdraw Mitel from the IPO registration process,” said Don Smith. “We look forward to working with the Inter-Tel team to accelerate our position in the dynamic unified communications market.”
The boards of directors of both companies have approved the transaction and it is subject to the approval of Inter-Tel stockholders and other customary closing conditions, including regulatory approvals. The transaction is expected to close in the third quarter of 2007.
The transaction is being funded by a combination of equity and debt. The equity component is being led by Francisco Partners with participation by Morgan Stanley Principal Investments (“MSPI”). The debt funding is being arranged by Morgan Stanley on behalf of Mitel. Morgan Stanley was the financial advisor to Mitel. In addition, Genuity Capital Markets was the independent financial advisor to the board of Mitel with respect to the transaction. UBS Investment Bank was the financial advisor to Inter-Tel.
The combined company, including Inter-Tel international subsidiaries such as Inter-Tel Europe, Swan Solutions and Lake Communications, will have solutions to address the needs of very small to large businesses globally. It will have market coverage in over 90 countries and customers in industries such as finance, healthcare, hospitality, retail, government and education.
“Having rapidly achieved the next step in our long-term growth plans with this merger, we will for the near-term, withdraw Mitel from the IPO registration process,” said Don Smith. “We look forward to working with the Inter-Tel team to accelerate our position in the dynamic unified communications market.”
The boards of directors of both companies have approved the transaction and it is subject to the approval of Inter-Tel stockholders and other customary closing conditions, including regulatory approvals. The transaction is expected to close in the third quarter of 2007.
The transaction is being funded by a combination of equity and debt. The equity component is being led by Francisco Partners with participation by Morgan Stanley Principal Investments (“MSPI”). The debt funding is being arranged by Morgan Stanley on behalf of Mitel. Morgan Stanley was the financial advisor to Mitel. In addition, Genuity Capital Markets was the independent financial advisor to the board of Mitel with respect to the transaction. UBS Investment Bank was the financial advisor to Inter-Tel.
There seems to be no downside to this transaction as customers of both companies have a more solid single company to rely on for upgrades, software and support. The combined entities will also be a more powerful force fighting against the likes of Cisco, Avaya and Nortel.
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