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No Surprise Mitel Gets Acquired

A private equity firm, Searchlight, is buying Mitel for 2 Billion dollars reports TechCrunch. This is no surprise but clearly the buy of Shoretel helped as the cloud focus of Shortel is the direction where things are heading, while Mitel has a large list of legacy telco customers.

It's an interesting buyout by a PE firm that has already taken out Rackspace and has a melange of holdings in tech and telecom.

When a PE firm buys a company they look to see profits be maintained and grow. That means a few things to me. Programs get cut to make sure margins are always maintained. Sooner or later people transition out, are laid off, offered incentives to leave so new, less expensive talent can be brought in. Lastly, projects to advance technology either happen or get killed off. As long as the numbers hit their projections everyone is fine. But miss the mark, and it's curtains for many, and those projects just languish.

Beyond that, paying a 25% premium for a company largely built on the past, with customers who are old school more than new school leaves a lot of room to keep making their numbers, so in that way it's a safe bet, but it's not a service provider for a post iPhone era startup or business to be looking towards for their phone service.




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