Mitel and Polycom merge to form $2.5bn cloud unified communications firm

Communications and collaboration suppliers Mitel and Polycom pool their resources to form a $2.5bn unified communications (UC) powerhouse

Unified communications (UC) supplier Mitel has announced it will buy video-conferencing specialist Polycom in a $1.96bn (£1.38bn) deal to create a $2.5bn cloud communications organisation.

Mitel said there had been a period of intense change in the communications and collaboration sector that changed the nature of the market.

It said it had already capitalised on such market dynamics – particularly the advent of cloud-based UC services – and the addition of Polycom would help users operate more efficiently.

“Polycom is one of the most respected brands in the world and is synonymous with the high quality and innovative conference and video capabilities that are now the norm of everyday collaboration,” said Mitel CEO Richard McBee.

“Together with voice communications from Mitel, the combined company will have the talent and technology needed to truly deliver integrated solutions to businesses and service providers across enterprise, mobile and cloud environments.”

Mitel claimed the acquisition would make it the market leader in business cloud communications, European IP PBX extensions, conference phones, and open session initiation protocol (Sip) sets, with an installed customer base in 82% of Fortune 500 firms.

Current customers include Carlsberg Breweries and Starwood Hotels and Resorts, while Polycom works with the likes of Nato, ad agency Ogilvy and Mather, and has a well-established presence in the NHS.

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Subject to approval, the merger is set to be wrapped up in the third calendar quarter of 2016, and will be accretive to Mitel’s earnings in 2017.

The combined company will be based in Ottawa in Canada, and will have about 7,700 employees. It will be headed by McBee. Mitel said it was likely to retain the Polycom name.

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