Friday, April 27, 2007

Mitel Acquires Inter-Tel for $723 Million

This story broke late yesterday, and I just wanted to draw attention to it. Not much public detail or blog coverage yet, but I think it's a good story. This is a $723 million deal, so it's not a small thing, and speaks loudly to Mitel's ambitions about becoming a bigger player in a rapidly growing market.

Mitel has long been a leading IP telephony vendor, especially in the small/mid size end of the enterprise market. Inter-Tel has a strong communications platform, and both companies are leading advocates of SIP and standards-based technologies.

It's another industry consolidation play, and will build two mid-tier players into a big, single mid-tier player who can dominate their space as well as better challenge the top tier vendors. Sounds like a good move for both companies, and it will be interesting to see how they combine their portfolios and manage joint customers.

Another angle to watch is how a private company absorbs a public company, especially with Mitel being Canadian and Inter-Tel being American. Also, Mitel has been on-again/off-again about going public, so this may be one way to address the issue, although my understanding is that Mitel will be remaining private.

For reference, I recently did a podcast with Don Smith, Mitel's CEO. He didn't tip his hand then about these plans, of course, but no doubt talks were underway at that time.

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