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What's Driving Mitel's $2B Polycom Acquisition?
Scale, partnerships and innovation are three main motivations for Mitel's recently announced $1.96 billion acquisition of Polycom. But it won't be easy making the combined operation successful.
The two companies earlier this month announced plans to combine to create a business with combined expected annual revenue of about $2.5 billion, specializing in cloud and on-premises video, calling and collaboration. Mitel Networks Corp. sells cloud-based on-premises PBX and hybrid voice and unified communications systems to enterprises and communications service providers.
Polycom Inc. (Nasdaq: PLCM) is a video-conferencing systems vendor, which will retain its brand. The combined company will be based in Ottawa, Canada, where Mitel is currently headquartered, and have about 7,700 staff, run by Mitel CEO Rich McBee. (See Mitel to Buy Polycom for $1.96B.)
Mitel's 2015 revenue was $1.16 billion with an operating loss of $10.2 million, while Polycom reported $1.27 billion revenue and an operating profit of $86.1 million.
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