Former Mavenir CEO to lead new charge with bolstered messaging, VoLTE, Vo-Wi-Fi platform targeting 5G, IoT and with heavily reliance on software.
Xura is set to become a larger player in the mobile communications space, inking a deal to acquire Mitel’s mobile business and Ranzure Networks in a move Xura said will position it to better compete as a provider of “5G” platforms.
The deal, which is expected to close early next year, will see Pardeep Kohli take over as CEO of Xura, replacing former CEO Philippe Tartavull. Kohli previously served as CEO of Mitel Mobile’s previous incarnation as Mavenir Systems and was co-founder and CEO of Ranzure. Xura said it would base its operations out of Richardson, Texas, and also added former AT&T CTO Krish Prabhu to its board of directors.
Once completed, Xura said the deal will combine its voicemail, messaging and security solutions with Mitel’s voice-over-LTE and voice-over-Wi-Fi platforms, video services, messaging, network access and core solutions, and Ranzure’s 5G cloud radio access network technology. The bolstered company said it plans to focus on a software-based joint architecture designed to support quicker development of operator services, and support a “carrier-as-a-service vision” targeting the transition to 5G networks and the “internet of things.”
“Our new company will offer a fully virtualized, software-based solution set across every layer of the mobile network infrastructure stack, including radio access, packet core and 5G applications,” said Kohli, in a statement. “We will be the only pure play solution provider with no vested interest in maintaining and promoting proprietary solutions. We look forward to partnering with our customers to achieve operational efficiencies as they prepare to handle the exponential traffic growth that the industry’s IoT and 5G applications will bring.”
Xura management noted the move was made possible by financial support from Siris Capital, which allowed the company to privatize operations. The company did not release financial details of the transactions, though Mitel said it would receive $350 million in cash, a $35 million noninterest bearing promissory note and an equity interest in Sierra Private Investments, which is the parent company that will own Xura and Mitel’s mobile division.
Mitel, which focuses on the unified communications and collaboration market, said the deal is part of a corporate restructuring to focus on the UCC market. The company earlier this year signed a deal with French operator Bouygues Telecom to provide its unified communications-as-a-service platform in support of enterprise customers.
“In a period of rapid change and massive technology transitions, scale and focus are key to driving growth and shareholder return,” explained Mitel CEO Rich McBee, in a statement. “This transaction will allow Mitel to achieve these goals. It also enables us to intensify our focus and capital in expanding our leadership position in the enterprise market as it prepares for large-scale digital transformation of premise-based systems to the cloud. Employees and customers of the mobile division will benefit by being part of a large carrier-focused company with the size, scale and support infrastructure needed to truly compete for and drive the next wave of 4G/5G innovation.”
Mitel said in addition to adjusting the company’s focus, the move will deleverage its financial operations and allow the company to initiate a stock buyback program. It also said it plans to record a “significant write-down of goodwill relating to the transaction in the fourth quarter of 2016.”
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