Mitel Announces IPO Closure, Joins Blackberry Alliance Program

by Gaurav Kheterpal on April 28, 2010

After a series of failed IPO attempts dating back to 2006, Mitel has finally closed an IPO offering of 10,526,316 common shares at US$14 each for gross proceeds of USD$147,368,424. Mitel IPO opened on NASDAQ Global Market under the symbol “MITL” on April 22, 2010. Most analysts expected the IPO to be priced between $18-$20 and an overall target of $180 million. Clearly, Mitel IPO has fallen short of industry expectations. However, there’s some good news reported by Mitel as well – It has joined the BlackBerry(R) Alliance Program as an Elite Member and announced plans to add BlackBerry(R) Mobile Voice System 5 (BlackBerry(R) MVS 5) to its feature-rich unified communications solutions.

A major part of the IPO proceedings will be used to pay Mitel’s outstanding debt which stood at nearly $440 million at the beginning of this year. Mitel had hoped to raise about $230 million when it first indicated in December that it would be having an IPO. The expectation was then revised to $242.11 million in March. The IPO offering was made through an underwriting syndicate led by BofA Merrill Lynch, J.P. Morgan, and UBS Investment Bank, who acted as joint book-running managers. Piper Jaffray, Genuity Capital Markets, and JMP Securities acted as co-managers for the offering.

In another Press Release, Mitel announced that it’s signed up for the BlackBerry Alliance Program and is adding the BlackBerry Mobile Voice System 5 technology to its own unified communications solutions. The combined solution will integrate Mitel’s Communications Director Platform and Dynamic Extension technology with the BlackBerry’s mobility features. Mitel’s current portfolio for BlackBerry smartphones includes the Mitel Unified Communicator (UC) Advanced Mobile Portal, and the Mitel UC Advanced Dynamic Location app.

Mitel was founded in 1973 by Terence Matthews, widely regarded as Canada’s Technology King. In fact, Mitel is named after him and the full name of the company is “Mike and Terry’s Lawnmowers” stemming back to their initial start at selling lawnmowers when they first started back in 1973. Matthews lost control of Mitel several years later but managed to buy back the ownership in 2001.

Despite losing nearly $193 million during its fiscal year 2009, Mitel managed to make a strong start in 2010 by returning to profitability. In fact, it is amongst the few pure-play communication vendors that managed to see off tough times without being snapped up by the biggies. When Nortel went bust, there were speculations that Mitel might bear a similar fate. However, the company weathered the storm and its recent announcement to join the BlackBerry Alliance Program is a sign of Mitel’s ambitious plans to make its presence felt in the smartphone market.

Will Mitel’s below-par IPO affect its growth in 2010? Will Mitel be able to cash in on the popularity of Blackberry? Let’s wait and watch.

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Written by: Gaurav Kheterpal. >. Follow > by: RSS>, Twitter >, >, or Friendfeed >

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