Mitel Expands 4G LTE Services with $560 Million Mavenir Acquisition

by Istvan Fekete on March 3, 2015

Canadian telecom services provider Mitel Networks announced on Monday, March 2, that it will acquire the US-based Mavenir Systems for $560 million, strengthening its position in the high-speed 4G LTE mobile market.

Under the terms of the acquisition agreement, Mitel will commence an exchange offer, pursuant to which Mavenir stockholders will be entitled to elect to receive either all-cash or all-stock consideration for each share of Mavenir common stock, subject to proration, in either case with a value of $11.08 plus 0.675 of a Mitel common share, which is equivalent to $17.94, based on the closing price of a Mitel common share on February 27, 2015.

The merger is projected to expand Mitel’s total addressable market by approximately $14 billion by 2018, and puts the company in a perfect position to capitalize on increasing demand for 4G LTE services, which is growing at about 52% annually, the press release notes.

“Mitel is a leader in enterprise and cloud communications, markets in which mobility is becoming increasingly influential. With wireless adoption of IP and 4G LTE and demand for next gen mobile services ramping quickly, we see a compelling opportunity to capitalize on a major market transition to add a high-growth mobile business to Mitel,” said Rich McBee, President and CEO of Mitel. “We believe the combination of Mitel and Mavenir creates a powerful new value proposition for enterprises and mobile service providers, using a common IP technology layer as the foundation for convergence, growth and competitive differentiation.”

Acquiring Mavenir was a strategic move, since the company has an established footprint of over 130 mobile customers, including 15 of the top 20 mobile carriers worldwide. Mavenir has captured the attention of the industry by launching a series of industry firsts, such as the world’s first network deployment of VoLTE (Voice over LTE) and RCS5, with MetroPCS (now T-Mobile); the first mobile network deployment of IMS-based VoWi-Fi (Wi-Fi calling), with T-Mobile US; and the first implementation of Virtualized RCSe, with Deutsche Telekom.

“The move to all-IP LTE mobile networks has created a unique opportunity for service providers to leverage a converged all-IP network to offer feature-rich business and consumer communication services to any device, anywhere, on any access network,” said Pardeep Kohli, President and CEO, of Mavenir. “We believe that the combined company is ideally positioned to capitalize on the trends within the communications industry today; namely, the convergence across enterprise and mobile networks to all-IP technologies, and the transition to cloud-based unified communications telephony and software-defined virtualized infrastructure.”

When the transaction closes, Mavenir will become the mobile business division of Mitel, keeping its brand name, and Pardeep Kohli will join Mitel in the role of President of Mavenir, reporting to Rich McBee, president and CEO of Mitel.

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Written by: Istvan Fekete. Follow by: RSS, Twitter, Facebook, or YouTube.

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