Mitel has entered exclusive negotiations with Atos to acquire Unify, the unified communications and collaboration (UCC) and communication and collaboration services businesses (CCS) of the Atos group.
The transaction would strengthen Mitel’s position in multiple areas worldwide and reinforce the company’s commitment to offering choice and flexibility to its customers.
Mitel and Unify would become prominent UC leaders in Europe and the Americas, with an estimated collective customer base of over 75 million users in over 100 countries and a channel community of more than 5,500 global partners.
Tarun Loomba, Mitel President and CEO, commented: “The UC industry today holds significant opportunities to grow through M&A, aligning well with Mitel’s strategy and expertise.
“The addition of Unify’s portfolio, partners and talent would significantly expand Mitel’s scale and offerings, enabling us together to offer customers even greater choice and flexibility throughout the lifecycle of their business communications.”
The transaction would see Mitel acquire Unify’s voice platforms, collaboration and contact centre products, device and endpoint portfolio, and related intellectual property.
Unify would also bring a Managed Services business that would further strengthen Mitel’s ability to deliver choices to UC customers.
Marcus Hänsel, Chief Executive Officer of Unify at Atos, said: “Unify and Mitel both have a deep heritage in the communications market centred around customer needs and a channel-driven go-to-market strategy.
“Mitel’s commitment to UC, heritage of success, and experience integrating complementary global businesses give us great confidence in our future together.”
The proposed transaction would notably expand Mitel’s reach and organisational scale, which in turn would lead to increased global revenue and profitability.
If completed, the merger would see Loomba serve as President and CEO of the combined company, with additional members of the management team being selected from both companies during the closing period.
Loomba added: “The value this deal creates for customers, partners, investors, and employees is exciting.
“Mitel and Unify’s channel partner communities represent a wealth of expertise available to guide customers forward as they aim to communicate and collaborate more effectively, particularly in this new world of hybrid work.
“Together, our portfolios and channel community would empower customers anywhere to leverage communications in ways that best support their needs and help them thrive.”
At the time of writing, neither Mitel nor Atos are yet to reveal the financial terms of the deal, and the transaction is subject to consultation from relevant employee representative bodies and other customary regulatory approvals, with closing expected between July and December 2023.
A Shift in Focus?
Mitel shocked the unified communications and collaboration industry when it announced a UCaaS tie-up with RingCentral.
The deal saw Mitel nudge its customer base of 35 million users towards RingCentral’s Message Video Phone (MVP) platform and saw Mitel’s private equity backers invest $200m in RingCentral.
To many, it signalled Mitel’s early exit from a technology that the market widely and rightly expected to dominate the communications landscape.
Speaking to UC Today in May 2022, Daren Finney, VP of Global Channel Sales, Mitel, explained the company’s decision to hand UCaaS opportunities to a competitor.
He said: “I don’t think anyone could have anticipated the decision to move UCaaS to one of our competitors.
“But RingCentral is in the top-right corner of any UCaaS Magic Quadrant, and, candidly, we weren’t there.
“So, when we thought about what was needed to deliver best-in-class [UCaaS] to our customers, that would have meant many years and hundreds of millions of dollars in investment or joining one of the goliaths in the market.”
The partnership with RingCentral saw Mitel focus on UC that is not delivered via the public cloud, with Finney branding it as Mitel’s “core competency”.
Announcing its exclusive negotiations with Atos to acquire Unify suggests that Mitel is looking to reestablish itself among the top players in the UC industry.
What remains to be seen is if the company can do this through solely on-prem UC technology.
A Perfect Match?
Mitel’s potential purchase of Unify could come at the perfect time for Atos after the French firm revealed in January 2022 that it would miss financial targets.
Atos said that revenue in 2021 was down 2.4 percent in constant currency to €10.8bn. The operating margin came in at around four percent against a target of roughly six percent.
The company put the revenue slip down to “project slippage” in the unified communications and collaboration industry caused by supply chain issues.
Some projects were also pushed back due to postponements from public sector customers in the UK and the Netherlands.
The proposed takeover of Unify by Mitel could grant the company a significant revenue boost and offload operating costs.
Atos has a similar relationship with RingCentral as the companies brought Unify Video by RingCentral to the European market in 2022.
The standalone video with team messaging is designed to enhance online meetings and support teams in a hybrid working environment.
Having already fostered its partnership with RingCentral, Mitel will be ideally placed to continue any relationship between the two companies.
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