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Mitel Networks Corporation

Type	Private
Industry	Telecommunications
Founded	Ottawa, Ontario (1973)
Headquarters	Ottawa, Ontario , Canada
Key people	Rich McBee, CEO Steve Spooner, CFO Bob Agnes, EVP and President, Mitel Products and Solutions Todd Abbott, EVP Global Sales and Services Wes Durow, CMO Graham Bevington, EVP Business Development Tom Lokar, Chief Human Resources Officer Jamshid Rezaei, CIO
Products	See here
Revenue	1.3 Billion US$ (2018)[1]
Number of employees	4,200 (2018)
Website	www.mitel.com

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

On April 24, 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 (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".^[3] Cowpland is quoted as stating that it stands for "MIke and Terry ELectronics", whereas 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). 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^[4] to the design of telecom switches. In 1975, they introduced the SX200 PBX.^[4] The company grew at a rate of over 100% per year for several years. They reached the $100 million annual revenue mark by 1981.^[5]

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 $230 million USD to acquire the communications network division of Mitel, along with the Mitel trademark.^[6][7] 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.^[8] Numerous patents were transferred to the company.^[9] 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.^[10]

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.^[11]

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.^[12]

"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,^[13] listed on Nasdaq with the symbol MITL, and its initial offering stood at $14 per share.^[14] Within a year, the stock price had dropped to $5.50^[15] and was described by CNBC's Jim Cramer as one of the worst IPOs of the year.^[16] Cramer blamed excessively optimistic pricing, excessive debt and the fear that company insiders would sell, dropping the stock value.^[16]

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.^[17]

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.^[18]

In November 2013, Mitel announced the purchase of Aastra Technologies.^[19]

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

In March 2015, Mitel announced to buy Mavenir Systems for $560 million.^[20]

In April 2016, Mitel announced its intention to buy Polycom for $1.96 billion.^[21] 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,^[22] forcing Polycom pay a $60 million USD fee to Mitel for cancelling the deal.^[23]

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.^[24][25][26]

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.^[27] 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.^[28]

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.^[29]

Product lineup

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

• MiCloud Connect


• MiCloud Flex


• MiCloud Telepo for Service providers


• MiVoice 250


• MiVoice 400


• MiVoice Business


• MiVoice Connect


• MiVoice MX-One

Applications (Contact Center and UC Apps): Mitel’s contact center and collaboration applications are designed to improve customer experience and increase productivity via voice, video and text.

• MiCloud Contact Centers


• MiContact Center


• Teamwork


• MiCollab

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

• Desk phones for MiCloud / MiVoice Solutions (select models like 6900s, 5300s, 400s)


• SIP phones for MiVoice solutions (6800s)


• Digital phones (8500s & 4200s)


• DECT Wireless solutions

References

External links

• Official website