Mitel

Mitel Networks Corporation is a Canadian telecommunications company. The company previously produced TDM PBX systems and applications, but after a change in ownership in 2001, now focuses almost entirely on Voice-over-IP (VoIP) products. Mitel is headquartered in Ottawa, Ontario, Canada, with offices, partners and resellers worldwide.

Mitel Networks Corporation

Type	Private
Industry	Telecommunications
Founded	Ottawa, Ontario (1973)
Headquarters	Ottawa, Ontario , Canada
Key people	Tarun Loomba, CEO Jamshid Rezaei, CIO Venkat Nagaswamy, CMO Graham Bevington, EVP Business Development Greg Hiscock, EVP Legal and General Counsel
Products	See here
Revenue	US$1.3 billion (2018)^[1]
Owner	Searchlight Capital Partners
Number of employees	4,200 (2018)
Website	www.mitel.com

In April 2018, the company announced it would be bought by an investor group led by Searchlight Capital Partners.^[2]

Corporate history

Founding

 

Cover of the 1981 Mitel annual report

Michael Cowpland and Terry Matthews founded Mitel in 1973^[3] (officially on June 8, 1973). Conventionally, its name is regarded as a combination of the founders’ first names and their first product – "MIke and TErry Lawnmowers".^[4] Michael Cowpland is quoted as stating that it stands for "MIke and Terry ELectronics", whereas Terry Matthews confirmed the lawnmower acronym during an interview on BBC Radio 4's The Bottom Line in May 2011.

The pair formed the corporation with the blessing of their employer, Bell Northern Research (based on the original premise that it stood for "Mike and Terry Lawnmowers"), in order to protect their intellectual property rights of tone to pulse converter design from their employer, who otherwise would have legal ownership rights. Their first shipment of three lawnmowers was lost in shipping, so they quickly adjusted to produce a telephony tone receiver product (a tone-to-pulse converter for central office use based on Cowpland's Ph.D. thesis). Michael Cowpland has also stated that the lawnmowers were not suited to Canadian lawns.

Following the success of the tone receiver, the founders extended their interest in the telecommunications industry. Early on, the pair realized the significance of the then-new microprocessor and software technology^[5] to the design of telecom switches. In 1975, they introduced the SX200 PBX.^[5] The company grew at a rate of over 100% per year for several years. They reached the $100 million annual revenue mark by 1981.^[6]

 

The lobby area of the Mitel office in the early 1980s

In 1976, the company expanded into the semiconductor field with the acquisition of Siltex, a bankrupt ISO-CMOS foundry in Bromont, Quebec. This evolved into a semiconductor division that specialized in mixed signal and thick film hybrid devices.

The next major product was a large digital PBX called the SX2000. This was an early attempt to integrate the voice and data functions of office systems. It was conceived as moving beyond the PBX to become an Office Controller, which would handle both voice and data applications within an organization.

In 1985, due to a financial crisis in the company, the board of directors created enough new shares to sell a controlling interest (51%) to British Telecom. British Telecom left the equipment business a few years later and sold its controlling interest in Mitel to an investment company called Schroder Ventures. Schroeder Ventures installed new management, which revitalized the company.

In the meantime, Mitel continued to diversify its product line, introducing the successful SUPERSET line of phone terminals, the GX5000 Central Office, and the SMART-1 call controller, among others. Additionally, Mitel developed and marketed a line of telecom-focussed semiconductor products.

Splits

In 2001, Matthews paid US$230 million to acquire the communications network division of Mitel, along with the Mitel trademark.^[7][8] It began a new chapter, under the name Mitel Networks, by developing a family of PBXs based on Internet standards for Voice over IP (VoIP).

The original company retained the semiconductor division. It was renamed Zarlink (Tsar of Links) Semiconductor to reflect its interest in networking.

Mitel Knowledge Corporation, also controlled by Matthews, was incorporated in 2001.^[9] Numerous patents were transferred to the company.^[10] It later evolved into MKC Networks, which made a family of SIP-based IP PBX systems.

An additional split took place in 2002, when the manufacturing arm was spun off out of Mitel Networks to become a contract manufacturer called BreconRidge. With these developments, the original Mitel Corporation was split into three companies: Zarlink (which though renamed is the original corporate entity), Mitel Networks, and BreconRidge.^[11]

New IPO

 

Mitel and Sun Microsystems equipment showcased at a 2007 trade show

On May 10, 2006, the new company announced its intention to launch an Initial public offering (IPO). No detailed information was released, but the press indicated that the company hoped to raise $150 million.^[12]

In April 2007, Mitel announced an agreement with Inter-Tel to purchase that company. This purchase would amount to a merger of equals, with the merged company being twice the size of the original Mitel. This acquisition was completed in August 2007. Management had announced that the companies will carry on under the name Mitel. As a result of the merger, Mitel withdrew from the IPO registration process.^[13]

"Mitel Knowledge" (now as MKC Networks) and Mitel Networks were and are ultimately controlled by Terry Matthews.

On April 22, 2010, Mitel became a public company,^[14] listed on Nasdaq with the symbol MITL, and its initial offering stood at $14 per share.^[15] Within a year, the stock price had dropped to $5.50^[16] and was described by CNBC's Jim Cramer as one of the worst IPOs of the year.^[17] Cramer blamed excessively optimistic pricing, excessive debt and the fear that company insiders would sell, dropping the stock value.^[17]

During the company's Q1 conference call, Don Smith (CEO) announced his retirement from the company once the board of directors is able to find a suitable replacement. Smith said he would remain on the board after retirement.^[18]

Acquisitions

In June 2013, Mitel announced the completion of acquisition of one of its key suppliers, prairieFyre Software Inc., a privately held global provider of contact center, business analytics, and workforce optimization software and services. The net cash cost to Mitel for the acquisition of prairieFyre is approximately $20 million. prairieFyre is an original equipment manufacturer (OEM) that has supplied Mitel with its existing contact center solution.^{[buzzword][19]}

In November 2013, Mitel announced the purchase of Aastra Technologies.^[20]

On March 4, 2014, Mitel announced the acquisition of contact center supplier OAISYS, a leading developer of integrated call recording and quality management solutions.^[buzzword]

In March 2015, Mitel announced to buy Mavenir Systems for $560 million.^[21]

In April 2016, Mitel announced its intention to buy Polycom for $1.96 billion.^[22] The deal was intended to give existing Polycom shareholders both cash and new Mitel shares for their holdings and result in Polycom shareholders owning 60% of the combined company. The acquisition was ended in favour of a merger with Siris Capital instead,^[23] forcing Polycom pay a US$60 million fee to Mitel for cancelling the deal.^[24]

In July 2017, Mitel announced they had reached a deal to buy ShoreTel for $530 million, increasing the size of the company to approximately 4,200 employees.^[25][26][27]

In January 2023, Mitel announced it entered into exclusive negotiation with Atos to acquire Unify.^[28]

Divestiture

On March 1, 2013, Mitel announced it has completed the sale of its DataNet CommSource business unit ("DataNet") in Sioux Falls to EarthBend, LLC.^[29] In December 2016 the company announced that it will sell its mobility unit for $385 million to Xura and that will focus its business on Unified Communications.^[30]

Going private

On November 30, 2018, Mitel announced that all the shares of Mitel were acquired by affiliates of funds advised by Searchlight Capital Partners. The shares ceased trading on the TSX and Nasdaq^[31] and were delisted.

After 2018

In April 2019, Mitel moved to merge with Avaya.^[32] The merger did not go through.^[33]

In October 2019, Mitel’s CEO Richard McBee resigned.^[34] Mary McDowell became the new CEO.^[35]

In May 2021, Mitel announced a partnership with Five9.^[36]

Litigation

In 2011, Mitel launched litigation against at least two Australian businesses for infringing on Mitel's trademark and the businesses for engaging in misleading or deceptive conduct under Australian consumer law. The first case against Melbourne telecommunications company Mytel was resolved, while the second case brought against a chain of mobile phone accessory and repair stores under the MyTel and HappyTel name was still waiting to be heard.^[37]

Product lineup

Communications platforms (Cloud / Onsite PBX): Mitel's business phone systems provide call center, unified communications and cloud communications solutions.

• MiVoice 5000
• MiCloud Connect
• MiCloud Flex
• MiCloud Telepo for Service providers
• MiVoice Office 250 (formerly Office 5000)
• MiVoice Office 400 (Primarily Hotel/Motel)
• MiVoice Business (including virtual MiVoice Business (vMiVB))
• MiVoice Business Express
• MiVoice Connect
• MiVoice MX-One

Session Border Controllers (Cloud / Onsite): Mitel's SBC acts as a security gateway between the company network and the Internet

• MiVoice Border Gateway

Applications (Contact Center and UC Apps): Mitel's contact center and collaboration applications.

• MiCloud Contact Centers
• MiContact Center Business / Enterprise
• Teamwork
• MiCollab
• NuPoint Unified Messenger
• MiCollab Advanced Messaging
• Audio, Web and Video Conferencing

Endpoints (Phones / Wireless): Mitel offers a range of SIP/IP and digital phones, consoles, conference phones and peripherals.

• Desk phones for MiCloud / MiVoice Solutions^[buzzword] (select models like 6900s, 5300s, 400s)
• SIP phones for MiVoice solutions^[buzzword] (6800s)
• Digital phones (8500s & 4200s)
• DECT Wireless solutions^[buzzword]
• SIP Wi-Fi handsets
• MiCollab Client
• TA7100 FXS adapters^[38]

References

1. "Why Mitel". www.mitel.com.
2. "Canada's Mitel to be bought by investor group in $2 billion deal". Reuters. Retrieved April 24, 2018.
3. "History of Mitel Corporation – FundingUniverse". www.fundinguniverse.com. Retrieved June 28, 2022.
4. "Sir Terry Matthews". Profit. June 2, 2010. Retrieved April 10, 2018.
5. . Wesley Clover. Archived from the original on April 8, 2018.
6. Mitel Annual Report 1982
7. Lau, Debra. "Forbes Face: Terry Matthews". Forbes. Retrieved July 4, 2018.
8. . Reuters. Archived from the original on July 4, 2018. Retrieved July 4, 2018.
9. "MITEL KNOWLEDGE CORPORATION". Canada Corporation Directory. Retrieved July 4, 2018.
10. "Patents Assigned to Mitel Knowledge Corporation – Justia Patents Search". patents.justia.com. Retrieved July 4, 2018.
11. OBJ Staff (2001). . Ottawa Business Journal. Archived from the original on September 28, 2007. Retrieved November 20, 2006.
12. Catherine McLean (2006). . The Globe and Mail. Archived from the original on September 30, 2007. Retrieved November 20, 2006.
13. "Mitel To Acquire Inter-Tel". tmcnet.com. April 27, 2007.
14. "Mitel makes second try at IPO". The Globe and Mail. April 22, 2010.
15. . UCStrategies.com. April 22, 2010. Archived from the original on August 18, 2010.
16. Johnathan Chen (July 1, 2011). "J.P. Morgan Lowering Price Target On Mitel Networks". Benzinga. Retrieved February 21, 2012.
17. Jim Cramer (June 23, 2010). "A How-To Guide for a Successful GM IPO". CNBC. Retrieved February 21, 2012.
18. "Mitel CEO Don Smith to leave post". September 3, 2010. Retrieved July 21, 2015.
19. "Mitel Acquires Contact Center Supplier prairiefyre" (Press release). June 17, 2013. Retrieved June 17, 2013.
20. "Mitel Networks buys Aastra Technologies in friendly takeover deal to create bigger high-tech player" (Press release). November 11, 2013. Retrieved November 11, 2013.
21. "Canada's Mitel Networks to buy Mavenir Systems for $560 mln" (Press release). March 2, 2015. Retrieved March 2, 2015.
22. "Mitel announces definitive agreement to acquire Polycom". mitel.com. Retrieved April 15, 2016.
23. "Polycom Agrees to End Mitel Merger Agreement and Approves New Merger Agreement With Siris Capital". polycom.com. Retrieved November 17, 2016.
24. "Mitel's Breakup With Polycom Has Major Silver Lining". Retrieved July 8, 2016.
25. "Mitel to buy ShoreTel for $430 million to create unified communications powerhouse". July 27, 2017.
26. Haranas, Mark (September 25, 2017). "Mitel Completes $530 Million Acquisition Of ShoreTel". CRN. Retrieved April 9, 2018.
27. Networks, Mitel. "Mitel Completes Acquisition of ShoreTel". GlobeNewswire News Room. Retrieved April 9, 2018.
28. "Mitel Enters Exclusive Negotiations with Atos to Acquire its Unified Communications & Collaboration Business (Unify), Significantly Expanding Global UC Footprint and Customer Base". news.mitel.com. Retrieved January 26, 2023.
29. "Mitel Sells DataNet CommSource Business Unit to EarthBend". globenewswire.com. Nasdaq GlobeNewswire. March 1, 2013. Retrieved January 6, 2017.
30. Lunden, Ingrid (December 19, 2016). "Xura buys Mitel Mobility for $385M and Ranzure to double down on 5G". techcrunch.com. TechCrunch. Retrieved January 6, 2017.
31. "Mitel Closes the Previously Announced Transaction with Searchlight Capital Partners". Bloomberg.com. November 30, 2018. Retrieved October 3, 2020.
32. "Mitel Offers to Combine With Avaya in Stock Deal Worth More Than $2 Billion". wsj.com. Retrieved June 22, 2021.
33. "Why a Mitel-Avaya Merger Would Be Good for the Industry". nojitter.com. Retrieved June 22, 2021.
34. "Best RingCentral Alternatives in 2021". founderjar.com. March 22, 2021. Retrieved June 22, 2021.
35. "MITEL ANNOUNCES MARY T. MCDOWELL AS NEW PRESIDENT & CEO". mitel.com. Retrieved June 22, 2021.
36. "Five9 and Mitel partner to expand cloud contact center portfolio". seekingalpha.com. Retrieved June 22, 2021.
37. "Mitel targets iPhone repairer trademark". ZDNet. December 2, 2011.
38. "MITEL TA7100 TERMINAL ADAPTERS". Retrieved June 8, 2022.