ShoreTel acquires M5 networks
Acquisition advances unified comms strategy
TechTrade | 07 Feb 2012 :
Provider of IP phone systems with integrated unified communications (UC) ShoreTel, has acquired hosted UC company M5 Networks.
Under the terms of the agreement, M5 shareholders will receive approximately $84 million in cash and 9.5 million shares of ShoreTel stock, which equates to a total of $146.3 million in initial consideration based on a ShoreTel's average stock price over the prior 30 trading days. In addition, M5 shareholders may receive additional contingent consideration of up to $13.7 million. The contingent payments are payable over the two years after closing and are based upon the achievement of certain revenue performance milestones for the year ended Dec. 31, 2012.
The acquisition of M5 enables ShoreTel to expand its solutions into the cloud and reach a large and growing market segment of customers that are looking to deploy IP communications through a hosted model. Industry trends such as cloud computing, virtualisation, data center economics and the flexibility of services-based models are driving the unified communications as a service (UCaaS) market.
"The acquisition of M5 positions ShoreTel as a leader in the fast-growing cloud UC market and delivers a suite of hosted telephony solutions that is unmatched in the marketplace," said Peter Blackmore, CEO of ShoreTel (pictured). "This acquisition is a critical step in our evolution and enables the company to capitalise on trends in cloud computing and advance our enterprise communications strategy."
M5 provides more than 2,000 companies with enterprise-grade communications on a subscription basis. This acquisition positions ShoreTel to be a leading provider in the emerging UCaaS market, enabling it to extend its technology and industry-leading customer satisfaction that are the hallmarks of its value proposition into the cloud through a hosted offering.
"We [M5] have achieved this position with a very strong management team and an excellent product offering that is the simplest in the industry," said Dan Hoffman, CEO of M5 Networks. "Joining forces with ShoreTel enables us to reach our ambitions of scale and cement our position in the hosted UC marketplace."
The transaction is subject to customary closing conditions, and is expected to close by the end of March.
ShoreTel is based in Sunnyvale, California, and has regional offices in Austin, Texas, UK, Sydney, Australia and Germany.