After its fourth quarter results were greeted with a yawn by investors last week, Mitel (Stock Quote, Chart, News: TSX:MNW, Nasdaq:MITL) today shook things up with a surprise acquisition.
The company announced that it will acquire U.S-based 4G LTE player Mavenir (Mavenir Stock Quote, Chart, News: Nasdaq:MVNR) in a stock and cash deal worth about $560-million.
“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 CEO Rich McBee.”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.”
Mavenir, which posted fiscal 2014 revenue of $129.8-million, boasts more than 130 mobile customers, including 15 of the top 20 worldwide mobile carriers. The company will continue to operate under its own brand and CEO Pardeep Kohli will join Mitel as President, Mavenir.
In Mitel’s fourth quarter, reported on February 26th, the company earned (U.S.) $10.8-million on revenue of $301.4-million, compared to a loss of $2.8-million on a topline of $144.8-million in last year’s Q4. Most of the growth can be attributed to another acquisition: in late 2013, Mitel paid $392-million for telephony solutions provider Aastra.