Mitel loses $175 million in sale of its mobile division, Mavenir

Less than two years after buying, Mavenir, a software-based telecommunications networking provider, Mitel agreed to sell this division to Xura Inc.

Mitel - MF Communications

Acquiring Mavenir for $560 million in 2015, Mitel had hoped to provide mobility solutions to carriers. The company, a leader in enterprise and cloud communications, also saw this move as an opportunity to expand into a high-growth business and tap into the emerging market for 5G wireless technology.

However, the move appears to have been seriously miscalculated, ending with the sale of Mavenir  to Xura Inc. (owned by Sierra Private Investments L.P.) for $385 million, at a loss of $175 million. It sees Mitel, traditionally a provider of phone and conference-call equipment and services to corporate and government clients, abandoning its strategy to become a player in the high-growth mobile communications arena.

Following an internal business review undertaken by Goldman Sachs just 18 months after Mitel bought Mavenir, CEO Rich McBee said he sees potential for growth in both the mobile space as well as the market for enterprise and cloud-based services, but acknowledged Mitel is not large enough to take on both opportunities at once.

“I don’t feel bad about it,” Mr. McBee said. “My job as CEO is to make sure that I’m generating shareholder value and a fair return for the assets trusted with me. This is a very logical next step for us. If you’re not going to get value recognized for performance, then you can’t just keep doing the same thing.

“The reality is we’re going to come back to a very focused story.”

The CEO said Mitel had no immediate plans for future acquisitions but added any future deals would focus on its primary businesses and that it will not stray into “adjacent” markets again.

This loss follows a failed bid of $1.96 billion to purchase voice and video conferencing specialists, Polycom. Outbid by Siris Capital, Mitel received a $60 million termination fee.

Mitel Networks is a Canadian based company and a global supplier of business communications’ solutions.

MF Communications supplies a range of Mitel Superset digital phones, including the Mitel Superset 420 & 430 models, multi-line digital telephones that support voice and data communications. The Mitel Superset 4025 and the 4125 are multi-line digital phones, with the 4025 ideal for call centre environments. The Mitel Superset 4150 is an executive level digital display telephone.

In addition to Superset phones, MF Communications can also supply Mitel IP phones. These include the 5200 IP series and the 5300 IP series, with everything from affordable, entry-level phones to sophisticated IP phones and devices with cordless handsets, conference units, and attendant consoles.

Can’t find the Mitel business phone you’re looking for? Call our team of telecoms experts on +44 (0)1892 514687, or email us.

In 2001, Mitel made ceased producing PBX systems to focus on VoIP products. However, Mitel PBX systems continue to be in operation and MF Communications can supply and support your Mitel PBX system with its wide range of spare PBX parts.

The Mitel SX2000 is a popular choice of PBX with digitally integrated communications for switching telephone calls and data connections between terminals and/or computers. The SX2000 can accommodate the layout of most enterprises by way of its flexible configuration. It can support up to 3000 telephones on its own, or more if linked with other PBX systems.

MF Communications carries a large stock of legacy and obsolete Mitel PBX second-user end-of-life (EOL) parts and products in our UK warehouse. All our remanufactured PBX parts and phones come with a full one-year warranty.

If you need help choosing the right system for your organisation, get in touch with us and we will be happy to advise you. Call on (+44) 01892 514687 or alternatively, you can email us.