ShoreTel Inc. (SHOR) Announces Acquisition of M5 Networks for $146.3 Million

February 1, 2012 4:07 PM EST
ShoreTel Inc. (NASDAQ: SHOR) today announced it has signed a definitive agreement to acquire M5 Networks (“M5”), a recognized leader in hosted Unified Communications. As a result of the acquisition, ShoreTel will be uniquely positioned to provide customers a choice between on-premise and hosted UC solutions.

Under the terms of the definitive 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.

According to a report by Gartner1, the IP Voice as a Service market is expected to show a 36 percent compounded annual growth rate in North America through 2015 to $2.2 billion. With this acquisition, M5 brings the specialized knowledge, infrastructure and skills to give ShoreTel rapid entry into the hosted UC market while maintaining its focus on growing its traditional premise-based UC business.

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