UPDATE: Mitel acquires prairieFyre for $20M

Courtney Symons
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For more than a decade, Ottawa telecom firm Mitel (TSX:MNW; Nasdaq:MITL) has been prairieFyre Software’s largest customer, generating 95 per cent of the company’s revenues.

Mitel chief financial officer Steve Spooner.

Mitel was looking to enter the growing contact centre market, estimated to be worth more than $3 billion annually. That’s why the $20 million acquisition of prairieFyre announced Monday was a natural fit, Mitel chief financial officer Steve Spooner said in an interview with OBJ.

“For some time, the view has been that this is a very logical thing to do,” he said. “We represent the primary channel to market for prairieFyre products. The R&D teams work closely together, the management team knows each other very well. With us looking at the contact centre space as a strategic focus for us in terms of growth and profitability, we thought the timing was right.”

PrairieFyre, a 2013 Employee’s Choice award recipient, is an original equipment manufacturer that supplies Mitel with its contact centre solution.

All 130 former prairieFyre employees will remain in their Kanata-based office space for the time being, Mr. Spooner said, without moving into Mitel’s office located on Legget Drive slightly more than one kilometre away.

Because Mitel previously lacked significant expertise in the contact centre field, there is very little overlap between roles and therefore the bulk of prairieFyre employees will be staying on board, according to the company’s CEO Chris Courneya, who will be appointed to vice-president and general manager of Mitel Contact Centres.

“The reaction I’ve gotten is very positive,” Mr. Courneya said. “Everyone is thinking it’s business as usual, let’s hunker down. We’re looking at it as one plus one is three. We’re going to be far better together than we were as an OEM."

Future investments into the division could mean hiring additional employees, but priority No. 1 will be ensuring a smooth integration, Mr. Spooner said.

“We would expect over time to be ramping up hiring,” he said.

Another strategic focus for Mitel has been the cloud business, and the company was getting an increased demand for a cloud-based contact centre.

“PrairieFyre provides a great platform for that,” Mr. Spooner said. “It takes an objection off the table with customers buying an OEM product. They feel more confident when we own the technology outright. We think this is extremely positive for both companies.”

Mitel has been a prairieFyre customer since the latter’s inception in 1998, said Mr. Courneya. In fact, the first prototype the company built was using Mitel’s technology.

In March, Mitel completed the sale of its DataNet/CommSource business unit to EarthBend, an American telephony and IT solutions provider for an undisclosed sum.

Organizations: Mitel, DataNet/CommSource

Geographic location: Kanata

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