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Remaking Mitel–one more time

The first time Mitel’s headhunters approached him last fall to become CEO, Rich McBee turned them down flat. “I wasn’t interested,” he said.

McBee was quite happy where he was running the communications unit of Danaher Corp., a U.S. conglomerate with a market value in excess of $30 billion (all figures U.S.). McBee, then 47, had a home and family in Texas — Kanata just wasn’t on his radar. But Mitel’s headhunters returned a few weeks later with a suggestion to at least think about it. McBee did.

Because he did, because he became intrigued by what he found in Kanata, Mitel — which reports its annual financial results June 30 — may have a decent shot at recovery.

McBee took over as Mitel’s chief executive last Jan. 17. Little more than three months later, on May 2, he was done with the forensics, and laid out the company’s new strategies. Mitel, which makes telephone systems for small and medium-sized businesses, would narrow its focus and, more crucially, stop competing with its own resellers — the independent businesses that market and install Mitel phone systems.

The moves were important clues about the problems McBee had found at the company co-founded in 1973 by Terence Matthews, who remains an important shareholder.

“Mitel had good products and good people but it obviously wasn’t performing,” McBee said in an interview with the Citizen. “It missed its projections out of the IPO (initial public offering in April 2010) and revenues were flat from there. Something was wrong.”

It didn’t take McBee long to discover what. Motel in 2007 had acquired Inter-Tel, an Arizona-based telecommunications equipment firm, for $730 million U.S.

Continue reading at the Ottawa Citizen


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