Relevance Matters
It All Relevant

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.

 

 

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Comments are moderated, and will not appear until the author has approved them.

Your Information

(Name is required. Email address will not be displayed with the comment.)