ShoreTel Acquires Hosted Unified Communications Pioneer M5 Networks

ShoreTel, a provider of IP phone systems with fully integrated unified communications (UC), has signed a definitive agreement to acquire M5 Networks, a provider of hosted unified communications, for $146.3 million in cash and stock. As a result of the acquisition, which is due to close in March, ShoreTel will be able to provide customers a choice between on-premises and hosted UC solutions.

The acquisition of privately held M5 enables ShoreTel to expand its solutions into the cloud and reach a large and growing market segment of customers that are looking to deploy IP communications through a hosted model.

"The acquisition of M5 positions ShoreTel as a leader in the fast-growing cloud UC market and delivers a suite of hosted telephony solutions that is unmatched in the marketplace," said Peter Blackmore, CEO of ShoreTel, in a statement. "This acquisition is a critical step in our evolution and enables the company to capitalize on trends in cloud computing and advance our enterprise communications strategy."

M5 pioneered hosted UC in 2000 and today provides more than 2,000 companies with enterprise-grade communications on a subscription basis.

ShoreTel is acquiring M5's entire operation, including its customer base, distribution capability, and proprietary network, and will be extending offers to substantially all of its employees. Following the close of the acquisition, M5 will be operated as a ShoreTel business unit and will be led by M5 CEO Dan Hoffman, who will become president and general manager of the new business unit.

"M5 is proud to be one of the leaders in the UC cloud market. We have achieved this position with a very strong management team and an excellent product offering that is the simplest in the industry," Hoffman said in a statement. "Joining forces with ShoreTel enables us to reach our ambitions of scale and cement our position in the hosted UC marketplace."