ShoreTel To Acquire Cloud Communications Company M5 Networks For Up To $146 Million

IP phone company ShoreTel has today announced that it is beefing up its offerings by acquiring unified communications company M5 Networks in a deal in other words valued up to $146 million in cash and stock.

ShoreTel’s motivation for snatching up M5 was an effort to be able to offer its clients a choice of either on-premise or hosted solutions, enabling the company to reach a larger and growing market of users looking to deploy unified communications solutions. Gartner predicts that the “Voice as a Service” market is expected to show a 36 percent compounded annual growth rate in North America earlier 2015 — to $2.2 billion.

The unified communications research to mobile devices

ShoreTel acquired enterprise mobility leader Agito Networks in October 2010 to extend the unified communications research to mobile devices, enabling them to solve the bring-your-own-device problems that are changing the enterprise market.

M5 Networks, too, has made a couple of acquisitions lately, including Callfinity last year and Geckotech the year prior. The cloud communications company, which was founded in 2000, provides phone systems, applications, and cloud communications for businesses, and claims to be one of the country’s largest specialized VoIP (Voice over Internet Protocol) providers.

ShoreTel announced its Q2 revenues today, with revenue coming in at $58.0 million, up 8 percent sequentially from the first quarter of fiscal 2012 and up 22 percent from the second quarter of fiscal year 2011. In spite of GAAP net loss for the quarter being $2.5 million, or $0.05 per share, ShoreTel had some highlights over the last six months, forging a distribution relationship with Ingram Micro in October, an expanded distribution agreement with Windstream, a North American communications service provider, along with expanding its relationship with Hewlett Packard, which will become a reseller of ShoreTel’s “Mobility solution.”

The statement

According to the statement, following the close of the acquisition, M5 will be operated as a ShoreTel business unit, which will be led by M5 CEO Dan Hoffman, during engineering teams will remain separate.

M5 Networks, a cloud communications for business company, provides phone systems, applications and an experience that businesses love. M5 has been providing cloud-based business phone solutions for more than eleven years and has over 2000 clients across North America, making it the country's largest specialized VoIP provider.