Unified Communication Industry Trends | Vyopta

Polycom Drops Mitel and Accepts $2 Billion Siris Offer

Written by Vyopta Marketing | Aug 3, 2016 8:17:54 PM
If you’ve missed the media swell around Polycom’s recent acquisition drama, you’ve likely been living under a rock. Early discussions between Polycom and Mitel began back in October 2015. In April 2016, every major business journal was covering Mitel’s $1.96 billion dollar acquisition of Polycom. However, after only a few months, Siris Captial Group swooped in and madePolycom a $2 billion offer they couldn’t refuse. 

Read on to learn plotline of this acquisition drama and other notables happening in the video conferencing industry. (HINT: Cisco and Acano are also making some magic happen!)

At Vyopta, we know Polycom’s battle story intimately. After all, they’re one of our valued partners. To know they are ending merger pacts with a company as well-known as Mitel for sweeter offers – wow! We tip our hats to you. 

Mitel Offer vs. Siris Offer

Mitel’s April deal agreed to buy Polycom for a mix of cash and stock valued at about $1.96 billion. Mitel sought after Polycom due to their foothold in the video conferencing market and planned to help Mitel tap into the business communications space. This merging was to create a new, $2.5 billion revenue business, differentiate each company’s portfolio, and provide the opportunity to be leader of innovation in the enterprise communications market. 

However,  Siris Capital Groups offer valued the deal at $14.50 a share, almost $2.00 more than Mitel. Obviously, the total offer went from $1.96 to $2 billion. A nice increase there, I’d say. 

Cost of the Break Up

Mitel didn’t lose out entirely, their stock did increase since it dropped over 9% in the first quarter of 2016. Also, Polycom has to pay them $60 million for ending their existing merger with them. However, the press can’t be the best thing for them right now. No one likes to be rejected, even if it is the best thing for everyone.

“The Mitel and Polycom combination brought with it significant longer-term strategic risks that may have impacted Mitel’s chance of success long term, while maintaining its independence from a telephony/call processing platform such as Mitel will enable Polycom to maintain its neutral/third party position in both the video and voice and point business.”
Tavis McCourt

Managing Director, Raymond James Financial Inc.

Overall, Polycom shares have surged as much as 13 percent to $12.30, the biggest intraday increase since October 2015. Meanwhile, Mitel jumped as much as 20 percent to $7.23, the most since January 2016.

Other News in Unified Collaboration

If you’re in-tune with the unified communications market, you’ve been reading staggering headlines like, “Mobile Unified Communications and Collaboration Market Worth $17.38 Billion by 2019” from PR Newswire. The market is exploding, which means we have even more news for you. 

On November 20, 2015, Cisco, a goliath in the video collaboration industry, announced their intent to acquire Acano. A privately held company based in London, Anaco provides collaboration infrastructure and conferencing software. This acquisition of Acano has enhanced Cisco’s collaboration strategy to deliver video — everywhere. The two companies are becoming one, and working to provide the best collaboration experience across every endpoint, every screen, every workspace and to every user.

In fact, we just had a representative come to our offer for a sneak peek and you are going to love what Cisco is bringing to the market with Acano under their wing.

Also, Cisco’s 2014-2019 forecast is both ambitious and impressive. They are reporting 17 percent year-over-year growth in the first quarter of the 2016 fiscal year. As this momentum continues, there will be a need to deliver solutions that connect any system, regardless of vendor, at a scale that is dramatically higher than ever before. Acano’s technology and expertise is smartening up things like look and feel, and the overall user experience.

Yep, the business collaboration market is going through some exciting new changes! Subscribe to our blog and we’ll be sure to keep you posted on the latest and greatest. 

Thanks for reading!