UCaaS Market Rocked Again by Mitel / ShoreTel Merger

Just weeks after Toshiba announced the closing of their business phone division, Unified Communications’ (UC) constituents are experiencing another market-altering development with the acquisition of ShoreTel by close competitor, Mitel.

This announcement comes just three years after Mitel first offered to buy out ShoreTel, as part of its apparent strategy to become one of the market’s dominating suppliers of communications software, hardware, and services. Despite a three-year wait, Mitel has succeeded in growing their portfolio considerably at a fraction of the price they first offered in 2014; Mitel’s initial offer was $8.10 per share.

This merger was formally announced on July 27, 2017, with details as follows:

  • Mitel is acquiring 100% of ShoreTel common stock outstanding shares, at $7.50 per share, for a total equity value of $530 million and a net cost of $430 million to be paid in cash
  • The monetary value represents a 28% premium over ShoreTel’s closing share price on July 26, 2017
  • The combined assets and revenue potential of the two companies catapults Mitel to #2 in the UCaaS market–a big step up from their previous rank at #6 (ShoreTel was ranked #4 in the market)
  • After the transaction is finalized, the Mitel brand will take over ShoreTel’s leading cloud communications software, business channels, and partner relationships, combining them with their well developed hardware and software portfolios
  • With this acquisition, Mitel looks forward to accelerating cloud adoption and migration and UCaaS in particular

The M&A process is expected to be a relatively smooth transition, thanks to ShoreTel and Mitel’s complementary services and product offerings. Impacts on ShoreTel customers, partners, and overall business structure remain to be seen.

Explore Your Options

As an industry innovator in UC solutions, Sangoma is looking forward to seeing future developments. As with any large flux in the market, there is always an element of uncertainty and apprehension. ShoreTel partners concerned about the transition and companies who are looking for a UCaaS provider may be interested in learning more about their alternatives.

Sangoma currently offers an award-winning and comprehensive portfolio of UC solutions for businesses globally. For partners who want to increase their bottom line, Sangoma also provides the best partner program in the industry.

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