The Wall Street Journal recently reported that "Avaya Weighing Bankruptcy Filing, Sale of Call-Center Software Unit" and speculated they would file for Chapter 11 protection as soon as next month. For those of us in the industry, Avaya's ills are well known and that it would only be a matter of time of when Avaya would file.
Who would be interested in acquiring contact center-less remnants of Avaya?
Here is what I think the profile of what a successful acquirer would look like:
- They would have to be in the telecommunications business now, have a global footprint, used to managing a reseller network and already have their own contact center offering.
- They would have to have a management team trusted by Wall Street and Private Equity to advance the large sum required.
- They would have to be audacious; this will be a big, bold move.
Mitel hits all of these marks. Obviously, they are already in the business and in some countries, Mitel is the largest telecommunications provider. Mitel has a well-established dealer channel, experience in managing national accounts, and has a proven track record of effective working relationships with a variety of customers and channel partners. With their own Contact Center product offering, Mitel would not be adversely affected by the contact center portion of Avaya going to a third party, especially since there is the possibility of a synergistic relationship with that third party.
Mitel has made a number of successful acquisitions and the deal to acquire Polycom only fell through because a higher bidder emerged. The Street trusts Mitel CEO Rich McBee, and was already prepared to help finance the $2B acquisition of Polycom, not too far off from the guesstimate of what Avaya is worth. Also attractive are the numerous synergies as redundancies are optimized. Mitel sees themselves as industry consolidators. A Mitel-Avaya combination would be a powerful alternative to Microsoft and Cisco, and be welcome development in the telecommunications industry.
When it comes to audacious in telecommunications, few can top Mitel co-founder and major shareholder, Sir Terrence (Terry) Matthews. He once greeted a conference audience with, "Let me tell you how I made my first billion dollars." Terry has made billions, lost billions, and founded dozens of companies. A combined Mitel-Avaya would be a great way to cap his already outrageously successful career.
Noted industry expert Zeus Kerravala recently interviewed Rich McBee in No Jitter about Mitel's future acquisition plans. Zeus concluded with "McBee, what's your next move? You have an industry waiting to see."
My bet is on Avaya.