Mitel Isn’t Done With Acquisitions Despite Losing Polycom Dealby
Fielding many calls from potential targets, CEO says
Prefers to use debt over equity to make potential acquisitions
Mitel Networks Corp. is still on the lookout for acquisitions even after its takeover offer for Polycom Inc. was rebuffed in favor of another suitor.
Mitel, which provides technologies for businesses to communicate and work together, is fielding calls from smaller companies looking to sell and plans to keep consolidating the market, Chief Executive Officer Richard McBee said in his first phone interview since losing out on Polycom.
“Literally the phone is ringing off the hook, we have a lot of opportunities,” McBee said Thursday. The exposure from the Polycom deal got the company’s message out, even though it fell through, he said.
Under McBee, Ottawa-based Mitel has pitched itself as a consolidator of older business communication technologies that can help make products more efficient and move them from being based on computers in company offices into cheaper cloud servers. Mitel bought Mavenir Systems in 2015 and Aastra Technologies in 2014.
The Polycom acquisition was meant to expand its business into videoconferencing.
Now, Mitel is looking for targets that have businesses more similar to its own, McBee said. Its current products include technology to facilitate voice calls through the internet and help run call centers. The company would take out debt to make purchases rather than use equity, McBee said.
Mitel initially agreed to buy Polycom in April for cash and stock in a deal valued at about $1.96 billion but eventually ditched the effort after a rival $2 billion bid from private equity firm Siris Capital Group.
Mitel also reported second-quarter profit Thursday of 19 cents a share, exceeding the average analyst estimate of 13 cents. Second-quarter revenue was $307.2 million, up 11 percent from the year before.