![]() Mitel Networks to acquire Mavenir Systems March 2, 2015 Exhibit 99.2 |
![]() | ©2014 Mitel. Proprietary and Confidential. Safe Harbor Statement 2 |
![]() | ©2014 Mitel. Proprietary and Confidential. Safe Harbor Statement (cont’d) 3 Forward Looking Statements Some of the statements in this presentation are forward-looking statements (or forward-looking information) within the meaning of applicable U.S. and Canadian securities laws. These include statements using the words believe, target, outlook, may, will, should, could, estimate, continue, expect, intend, plan, predict, potential, project and anticipate, and similar statements which do not describe the present or provide information about the past. There is no guarantee that the expected events or expected results will actually occur. Such statements reflect the current views of management of Mitel and are subject to a number of risks and uncertainties. These statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, operational and other factors. Any changes in these assumptions or other factors could cause actual results to differ materially from current expectations. All forward-looking statements attributable to Mitel, or persons acting on its behalf, and are expressly qualified in their entirety by the cautionary statements set forth in this paragraph. Undue reliance should not be placed on such statements. In addition, material risks that could cause actual results to differ from forward-looking statements include: the inherent uncertainty associated with financial or other projections; the integration of Mavenir and the ability to recognize the anticipated benefits from the acquisition of Mavenir; the ability to obtain required regulatory approvals for the exchange offer and merger, the timing of obtaining such approvals and the risk that such approvals may result in the imposition of conditions that could adversely affect the expected benefits of the acquisition of Mavenir; the risk that the conditions to the exchange offer or merger are not satisfied on a timely basis or at all and the failure of the exchange offer or merger to close for any other reason; risks relating to the value of the Mitel common shares to be issued in connection with the exchange offer and merger; the anticipated size of the markets and continued demand for Mitel and Mavenir products and the impact of competitive products and pricing that could result from the announcement of the acquisition of Mavenir; access to available financing on a timely basis and on reasonable terms, including the refinancing of Mitel’s debt to fund the cash portion of the consideration in connection with the exchange offer and merger; Mitel's ability to achieve or sustain profitability in the future since its acquisition of Aastra; fluctuations in quarterly and annual revenues and operating results; fluctuations in foreign exchange rates; current and ongoing global economic instability, political unrest and related sanctions, particularly in connection with the Ukraine and the Middle East; intense competition; reliance on channel partners for a significant component of sales; dependence upon a small number of outside contract manufacturers to manufacture products; and, Mitel’s ability to implement and achieve its business strategies successfully. Additional risks are described under the heading "Risk Factors" in Mitel's Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on February 26, 2015, and in Mavenir’s Annual Report on Form 10-K for the year ended December 31, 2014 to be filed with the SEC. Forward-looking statements speak only as of the date they are made. Except as required by law, Mitel does not have any intention or obligation to update or to publicly announce the results of any revisions to any of the forward-looking statements to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward-looking statements. |
![]() | ©2014 Mitel. Proprietary and Confidential. Transaction Overview 4 Under the terms of the agreement, Mitel Networks will acquire Mavenir Systems for $560 million purchase price Consideration $17.94 per share to MVNR shareholders; $11.08 per share in cash and 0.675x Mitel shares per share of Mavenir Cash consideration funded with ~$50mm in cash from the balance sheet and new debt Pro Forma Ownership MVNR shareholders will own ~16% of MITL Closing Details Anticipated to close in second quarter 2015 Leadership • Pardeep Kohli will join Mitel as President, Mavenir, Mobile Division of Mitel Key Pro Forma Financials Revenue: $1.2bn EBITDA: $164mn Synergies: ~$20mm run rate Pro Forma Net Debt / Adjusted CY14 EBITDA: 3.2x |
![]() | ©2014 Mitel. Proprietary and Confidential. Mavenir Overview 5 • Wireless pure-play networking solutions provider • Leading provider of mobile voice, messaging and video solutions • Capitalizing on two key network trends • 4G All-IP • Virtualized, scalable software • Customer relationships with 15 of the top 20 mobile global operators • 4 of top 5 in the Europe • 3 of the top 4 in US • Positioned well to drive growth from transition to 4G/VoLTE • Strong financial profile • CY-2014 Revenues: $129.8 million, up 28.1% vs. CY13 • ~1100 employees • Growing number of carrier footprint wins |
![]() | ©2014 Mitel. Proprietary and Confidential. Mavenir – A Leader in Mobility Point S/W-based Solutions Complete S/W Portfolio 6 End to End (proprietary H/W) |
![]() | ©2014 Mitel. Proprietary and Confidential. Customer Highlights 7 VoLTE/WiFi 17 RCS 17 CORE 23 2G/3G/4G 130+ Based on Mavenir 2Q2014 data Growing Roster of Blue Chip 4G Customers • 4 of top 5 operators in the Europe; 3 of top 4 operators in US Diversified 4G Customer Base • Geographically diverse, as well across product lines Strong 2G/3G Customer Base • 15 of top 20 operators globally |
![]() | ©2014 Mitel. Proprietary and Confidential. Strong/Diverse Customer Base 130+ Customers Globally with over 2B Subscribers Growing Roster of Tier One Customers for Next Generation 4G Solutions 8 |
![]() | ©2014 Mitel. Proprietary and Confidential. Mavenir’s 4G Solutions Addressing the Opportunity 9 |
![]() | ©2014 Mitel. Proprietary and Confidential. The New Mitel Next Generation Fixed, Mobile & Cloud Communications Experts 10 Enterprise Mobile Experts in Business & Consumer IP Communications Positioned to lead the Mobilization of Unified Communications Telco Cloud Front-Runner • Virtualized SW Portfolio • NFV/SDN Architectures Market Scale & Diversity • 2500+ Channel Partners • 15 of Top 20 Mobile Operators Global Leadership • #1 Business Cloud Communications • #1 Eur / #3 US Total PBX/IP PBX • A Leader in VoLTE/RCS |
![]() | ©2014 Mitel. Proprietary and Confidential. Market Dynamics Driving Change 11 Commoditization Price Pressure Segmentation New Service Providers Challenging Traditional Operators’ Business & Operating Model Operators Rich services driving usage Expansion into enterprise Mobile apps supporting BYOD Pricing driving residential share OTT Cloud Telephony Service ubiquity constraints Economy of scale challenges Wireline Wireless Business |
![]() | ©2014 Mitel. Proprietary and Confidential. Capitalizing on Two Major Trends 12 Convergence Wireline Wireless Business CONVERGENCE Operators Org Realignment Wireless and Business Units Consolidation Adjacency Expansion, Mergers, Technology Rationalization Cloud Virtualization, NFV, SDN, Telco Cloud Service Ubiquity Network Consolidation New Business Models Operators are Transforming Cloud |
![]() | ©2014 Mitel. Proprietary and Confidential. Convergence Creating Market Opportunity 13 Mobile Infrastructure Hosted Business Services Cloud Seats Premise Equipment Consumer Business Operator Enterprise #2 VoLTE/RCS #1 EMEA/#3 N.A. PBX/IP PBX #1 Business Cloud Communications UC Mobility GREATER THAN SUM OF ALL PARTS RELATIONSHIP VALUE TECHNOLOGY Valuable Business Features Enterprise relationships Converged IP Network Incumbent at operators Mass Market Scale Cloud Infrastructure |
![]() | ©2014 Mitel. Proprietary and Confidential. Mobilization of Unified Communications Collaboration Cloud/Hosted Contact Center Voice/Video SERVICES DELIVERY Mobilization of Unified Communications Across Industry Verticals and Access Technologies Mobile 14 |
![]() | ©2014 Mitel. Proprietary and Confidential. Speed up to 15x faster Services more revenue Savings less cost Spectrum up to 10x better Why 4G LTE is a Necessity 15 |
![]() | ©2014 Mitel. Proprietary and Confidential. 4G LTE Progress Operators globally 1000+ Source: GSMA, February 2015 2014 – 59.6 million VoLTE subscriptions 2019 – 1.2 billion VoLTE subscriptions Source: ABI June 2014 16 <5% Connections on LTE 801 invested in LTE 445 launched |
![]() | ©2014 Mitel. Proprietary and Confidential. Mitel • Growth – Creates three growth pillars with combined $300m revenue growing at >20% YoY – Cloud + Contact Center + Mobility – Supply Operators directly in addition to Enterprises • TAM – $14b increase by 2018 • Portfolio – Accelerates Mobile UC evolution – Introduces highly scalable mobile platform Mavenir • Scale – Grows and diversifies revenue sources ($1B+) – Growth in Sales and Operations to support increased business – Expanded global presence via Mitel channel partners • Portfolio – Introduces feature rich business services – Accelerates in-flight Mobile UC and differentiated end-to-end SIP Trunking offer – Gains access to robust vertically integrated Enterprise solutions Transaction Benefits 17 |
![]() | ©2014 Mitel. Proprietary and Confidential. Source: Company filings and Wall Street research. (1) TAM growth includes new Business Services in 2015, which grows from $1.1bn in 2015 to $3.1bn in 2018 at a CAGR of 42%. Voice Expertise Operational Expertise • Differentiated and broadest business IP-voice portfolio in the industry for all business size segments with broad regional strength • Continually expanding margins and increasing profitability; history of successful synergy attainment • Management successfully integrated and realized synergy from multiple acquisitions Execution on Growing Market Mitel Skill Set Premise Cloud • Stable and profitable business • Provides strong cash flow to support high growth Cloud and Carrier Mobility growth • Hardware to software transition • $6.8bn TAM in 2014 growing at 1-2% CAGR to $7.6bn in 2018 • Revenues growing at 24% and exceed 10% of quarterly revenue • Positioned to benefit from fast growing market • Public and private cloud • $5.0bn TAM in 2014 growing at 14.7% CAGR to $8.7bn in 2018 Mobile Opportunities • Mavenir provides key strategic carrier relationships • Key personnel with expertise in mobile infrastructure • Strong technology and patents • Large and rapidly growing market: $2.6bn TAM in 2014 growing at 54.5% CAGR to $14bn 2018 (1) • Mitel undergoing successful business transition to Cloud and Contact Center, two rapidly growing markets • Cloud and Contact Center to make up 16% of Mitel revenue in 2015; Contact Center outpacing market growth by 3x • Proven ability to grow faster than market Leveraging Mitel’s Core Skill Sets 18 |
![]() | ©2014 Mitel. Proprietary and Confidential. Expand Market Through Combination 19 Source: IDC. Additional TAM from Mavenir Mitel Existing TAM ($bn) TAM Expansion 19.6% Pro Forma ‘14 – ’18 CAGR 6.8 7.6 5.0 8.7 2.7 3.9 2.6 14.8 $17.1 $35.0 2014 2018 Premise Based IP PBX Hosted/Cloud Voice and UC Contact Center Applications Mobility 2.7 2.6 |
![]() | ©2014 Mitel. Proprietary and Confidential. Represent 16% of Revenue in 2015 Represent 28% of Revenue in 2015 Source: Mitel and Mavenir management estimates. 2015 Before 2015 After Premise Growth Rate: (4%) Cloud + Contact Center Growth Rate >20% Premise Growth Rate: (4%) Cloud + Contact Center + Mobility Growth Rate >20% Mitel’s Three Strategic Growth Pillars Mobile/Cloud/Contact Centre Represent ~30% Rev Mix in 2015 20 Contact Center 5% |
![]() | ©2014 Mitel. Proprietary and Confidential. Mitel / Mavenir Portfolios Mobile 2G / 3G / 4G / Wi-Fi MMTEL & 3GPP Services Converged IP Core Mavenir Mitel • Highly Scalable Mobile Platform • Converged IP Core Network • Wireless & Fixed Network Services • Feature Rich Business Services • Leading Cloud Telephony Services • Broad Industry Vertical Solutions 21 |
![]() | ©2014 Mitel. Proprietary and Confidential. Mitel + Mavenir Portfolios Mobile / Cloud / Fixed 2G / 3G / 4G / Wi-Fi MMTEL & 3GPP Services Converged IP Core Mitel • Highly Scalable Converged Mobile & Fixed Platform • Broad Range of Fixed/Cloud Mobile Business Services • Suite of Converged IP Core Networking Solutions • Broad Industry Vertical Solutions 22 |
![]() 2014 Proforma P&L 23 Represents Non-GAAP financials Revenue $1,104M $130M $1,234M Gross Profit 1 $590M $73M $663M Gross Margin % 53% 56% 54% Operating Expenses 1 $457M $79M $536M Operating Profit 1 $133M ($6M) $127M Operating Margin % 12% (5%) 10% EBITDA 1 $167M ($3M) $164M EBITDA Margin % 15% (2%) 13% | ©2014 Mitel. Proprietary and Confidential. 1 |
![]() | ©2014 Mitel. Proprietary and Confidential. Preliminary Thoughts on Synergies • Early estimates $20M, by mid CY17, with $26M est. one time costs • Approx. 200 outsourced R&D staff in India…bring in house $3-4M • Leverage low cost R&D centre in India $3-4M • Duplicate public company costs $3-4M • Facilities/Marketing programs/Sales/IT/G&A $3-4M • R&D cost avoidance re: mobile PBX (leverage Mitel’s Telepo solution) $3-5M • Attractive revenue synergies seen in combined company TBD • Leveraging scale/balance sheet of larger entity • Cross selling Mitel cloud solutions via existing Mavenir carrier relationships • Cross selling Mavenir solutions into existing Mitel carrier relationships 24 |
![]() | ©2014 Mitel. Proprietary and Confidential. Acquisition Drives Improved Target Model 25 1 2 Prior Target Model Mitel (2017) Post –Mavenir Target Model Mitel {2017} 1 Gross Margin 55% - 56% 57% - 59% R&D 2 9% - 10% 11% - 12% SG&A 2 30% - 32% 30% - 31% Adjusted EBITDA 17% - 19% 18% - 20% Effective Tax Rate 18% - 20% 18% - 20% 1 Target model assumes integration and synergies complete, exiting 2017 Excludes stock-based compensation, amortization of acquired intangibles, and special charges and restructuring costs |
![]() | ©2014 Mitel. Proprietary and Confidential. Big Picture - Strategy Rapid growth with 27% year/year Results outpacing market growth by 3x Robust Ecosystem Rapidly Expand in the contact center Solid revenue Excellent improvement in gross margin Hardware to software transition Large installed base Maximize value in the premise Fastest growing Public and private Revenues exceeded 10% of total quarterly revenue Accelerate in the cloud Rapidly growing end market (55% CAGR) Convergence of fixed and mobile technologies BYOD movement Expand into mobile 26 |
![]() | ©2014 Mitel. Proprietary and Confidential. Key Transaction Takeaways • An offensive and defensive strategy • Enhanced shareholder value creation • Growth • Comfortable leverage/rapidly de-levers • Modestly dilutive in 2 half of CY15/accretive in 2016 • Materially expanded TAM opportunity/rapid growth market • Cloud + Contact Center + Mobile builds a $300+ million revenue base growing at >20% year-over-year • High visibility with 15 of top 20 mobile global operators, including top 4 in the US Mitel - the Next Generation Fixed, Mobile & Cloud Communications Experts 27 nd |
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