You are using an older browser version. Please use a supported version for the best MSN experience.

Siris Capital wants to buy Polycom for $2B in cash, subject to Polycom cancelling its Mitel merger

TechCrunch TechCrunch 8/07/2016 Ingrid Lunden

An interesting twist in one of the bigger enterprise acquisition stories of the year. After Mitel earlier this year announced that it would acquire Polycom for $1.96 billion and consolidate the two companies’ enterprise communication businesses, today Siris Capital has come in with a higher offer: it has agreed to acquire Polycom for $2 billion in cash and take it private, working out to $12.50 a share. The deal is dependent on Polycom cancelling its deal with Mitel, which Siris says that Polycom says that it has done, and Polycom itself has confirmed with its own statement.

“Polycom has informed Siris that its Board of Directors has unanimously determined Siris’ offer to constitute a ‘Company Superior Proposal’ under the terms of its merger agreement with Mitel,” a statement said. “Polycom has also announced its intention to terminate promptly its merger agreement with Mitel, subject to the terms thereof.” Polycom’s market cap as of this morning is around $1.47 billion.

It’s an abrupt turn of events, considering that Mitel and Polycom were in negotiations for 10 months before announcing their deal back in April. On a wider scale, there have been a number of consolidation plays in the enterprise IT market, and a merger seemed in keeping with that wider trend. Both Mitel and Polycom compete against the likes of Cisco and Avaya and had complementary businesses. Mitel is perhaps best known for its IP telephony solutions, including PBX systems, while Polycom is a leader in conferencing services.

Apart from being a relatively marginal $40 million dollars higher, the Siris offer is in all-cash, and is significant for another reason: it will keep Polycom — one of the giants in video and voice conferencing — as an independent operation, regardless of what happens to that operation in the future as part of a portfolio of other telecoms interests.

“Polycom has a 25-year history serving the audio and video collaboration needs of the most demanding enterprises and is a globally recognized brand synonymous with innovation and the highest quality. We are very excited for the opportunity to partner with Polycom and its leadership team, as the Company fits well with Siris’ investment focus on mission-critical telecommunications businesses,” said Dan Moloney, Siris Executive Partner, in a statement. “The industry is transitioning to a hybrid on-premise and cloud-based Unified Communications environment. We believe that as an independent private company, Polycom would be best positioned to continue its heritage as a best-in-class communications solutions provider to more than 400,000 companies and institutions, channel partners, and the evolving Unified Communications ecosystem.”

Siris says that the deal will be financed by way of equity and debt, but it doesn’t specify the proportions. The debt will come from Macquarie Capital. The offer will be in place until July 15, but it appears to be a done deal in terms of the commitments outlined by Siris in its announcement.

More to come.

More from TechCrunch

image beaconimage beaconimage beacon