Merging Mitel Networks and Aastra Technologies FAQs for Customers Why has Mitel decided to pursue this merger? We believe there are a number of compelling immediate and long-term benefits for the combined organization, which drove both companies to pursue this deal: Immediate Growth & Scale in a Consolidating Market. This deal puts the company at the forefront of industry consolidation, ideally positioning Mitel to drive profitable growth and value for our employees, channel partners, customers and shareholders. The new company has the potential for twice the value, revenue, reach, and momentum to drive profitable growth for customers, partners, shareholders and employees now and in the future.. US$1.1 billion combined total revenue US$100 million cloud business Global customer base of 60 million end users #1 market share in Western Europe Competitive solutions portfolio to address business of any size Enhanced Financial Scale and Operating Leverage. As standalone businesses, Mitel and Aastra were independently strong, profitable and cash generating. Together, the combined organization has one of the best financial platforms in the industry, with the resources to invest in continued innovation and growth. Immediate Market Leadership and #1 market share in Western Europe and growing market share globally. Combining the geographic strengths of Mitel and Aastra propels the combined organization to #1 provider of business communications in Western Europe. Aastra has a large customer base and a strong, sustained market share position in the European market for enterprise communications. Complementary Geographic Strength. There is very little geographic, channel or portfolio overlap. Mitel is stronger in markets such as North America, UK, Canada, the Netherlands and Australia. Aastra is considerably stronger in markets such as France, Germany, Sweden and Switzerland, countries in which Mitel has only limited market share. We believe that this deal will provide the organization with immediate scale and position as a top tier vendor in several markets. New Channel Relationships and Broader go-to-market Reach. Aastra s channel relationships include long term partnerships with tier one European carriers such as Swisscom (Switzerland), Orange Business Services (France), Deutsche Telekom (Germany), Teliasonera (Sweden), Telecom Italia (Italy), Telefonica (Spain), KPN (Netherlands), Belgacom (Belgium), Telefonica (Brazil), Telmex (Mexico), Telecom Argentina and Brazil Telecom. They also have presence in the Cloud and Hosted space 1
supporting several large US projects including Internet2 for higher Education, AT&T Hosted Voice Services. Their cloud position was further strengthened with the recent acquisition of Swedish-cloud service provider Telepo. Installed Base Opportunity - This merger creates one of the industry s largest installed bases of business communications users (over 60 million) at a time when the industry is on the cusp of a major transition to cloud creating a tremendous opportunity to seamlessly transition this installed base to cloud communications, over time as customers are ready. Growth Portfolio Opportunities. We believe that bringing Mitel and Aastra together will open up new growth opportunities with a significantly expanded portfolio that can scale from small business to large enterprise markets and with a complementary suite of applications including mobility, video, contact center and solutions to leverage the growth in both Lync based environments and cloud based services. What is the company s brand and branding strategy? Internally, the combined company will globally operate under the name Mitel. The external branding strategy of the company has two primary phases. Phase 1 Immediately following deal closure, the company will operate under three brands externally: Operations in the United States, Canada, Latin America, and the Asia-Pacific will be branded as Mitel Legacy-Aastra businesses in Europe, the Middle East and Africa will be branded as Aastra, a Mitel Company The direct business in Germany will be branded as DeTeWe, A Mitel Company Phase 2 The company will transition to a single Mitel brand in all markets, beginning in June 2014. The only exception to this will be the direct business in Germany, which will continue to leverage the brand DeTeWe, a Mitel Company. Where will Mitel be headquartered? The combined company will be headquartered in Ottawa, Canada. What is the integration plan to bring the two companies together? In a merger of this size there are immediate, near term and long term opportunities to integrate the two companies into a unified organization. This is a process that requires a careful balance 2
of thoughtful planning and timely implementation. It is not a process that will take place overnight or with abrupt disruptions to our channel partners, customers or other stakeholders. While this is an exciting time for both organizations, it is vital that we stay resolutely focused on driving our current business. A small cross-functional integration team with representation from both companies has been established to review our businesses today, evaluate the opportunities, and define the full and detailed integration plan. How does this deal differentiate you from your competitors? Mitel now has the most comprehensive portfolio in the industry, covering the entire customer and market landscape: From platforms, to applications, to devices; From digital to IP to Cloud technologies; For the smallest business to the largest enterprise. Our integrated portfolio gives Mitel a strong competitive advantage and we believe ideally positions us to serve our customers and support our channels globally, regionally, and by vertical; now and well into the future. The combination of the companies creates an enviable product offering which provides customers with the greatest choice in the industry and the best path to cloud. How does the merger impact Mitel s financial structure? As a result of this merger, Mitel has one of the best financial platforms in the industry. The combined organization boasts a diversified $1.1 billion in annual revenue, strong free cash flow and reduced financial leverage. We believe that this is an exciting opportunity that creates the financial scale and operational leverage to drive shareholder value. How will decisions regarding the company s product portfolio be made? In a merger of this size there are immediate, near term and long term opportunities to cross leverage features and capabilities, to add value across the portfolio, and to maximize R&D investment and supply chain. We are taking a very balanced and deliberate approach to maximizing our portfolio assets, defining product migration roadmaps and aligning our R&D investments to ensure we remain consistent with Mitel s business strategy to leverage the core, invest in the cloud and rapidly expand in the contact center. A team of lead solutions architects and engineers from both companies have begun the detailed process of mapping out the complete offering - by technology, by customer segment, and by geography. 3
We will be working towards defining a global phone portfolio and a global set of applications by integrating the best of both companies. All portfolio decisions will be made with the following fundamental principles in mind: We will protect and respect customer investments and contracts We will protect channel partner revenue and relationships We will offer a global portfolio and address regional requirements We will protect the revenue and profitability of Mitel All portfolio decisions will be made in close consultation with our staff, our customers and our partners, and all changes to product roadmaps will be announced when it makes sense to do so. As of today, the full portfolios of both companies are available. Mitel has publically announced that the combined entity is expected to deliver synergies of $50M annually over a three year period. Where specifically within the business is Mitel expecting to capture these savings? A merger is only a strong strategic move if the combined company is able to run more efficiently than either organization on its own. There are three primary areas within the business in which Mitel expects to achieve synergies: 1. Leveraging a combined supply chain and rationalizing distribution. 2. Eliminating overlap in functions. 3. Eliminating duplicate spending across all functions. As standalone businesses, Mitel and Aastra are already independently strong, profitable and cash generating. We believe that achieving the above synergies will provide the combined organization with the resources to invest in continued innovation and growth. Will there be a change in Mitel/Aastra s go-to-market strategy? As of today, there is no change to our existing go-to-market strategies. Our immediate priority is to continue to provide the level of support our channel partners and customers have come to expect from us. As part of the integration process, we will be taking a very balanced and deliberate approach to evaluate our existing go-to-market strategy to continually improve Mitel s value proposition to customers and channel partners alike. If changes to Mitel s go-to-market strategy arise, all efforts will be taken to ensure that they are communicated and implemented in a non-disruptive manner. Why should I purchase existing Mitel and Aastra products? As of today, Mitel has the most comprehensive portfolio in the industry, spanning the entire customer and market landscape: From platforms, to applications, to devices; 4
From digital to IP to Cloud technologies; For the smallest business to the largest enterprise. Our enviable product offering provides customers with the greatest choice within the industry and the best path to the cloud, at the pace and preference of the customer. We believe that our integrated portfolio ideally positions Mitel to uniquely serve our customers and support our channels globally, regionally, and by vertical; now and well into the future. Throughout the integration process, we are taking a very balanced and deliberate approach to defining product migration roadmaps and aligning our R&D investments to ensure that we continue to support our customers with a strong product offering. Should I continue to work directly with their current representatives for account management and technical support? Yes. At this time, please continue to work directly with your current representatives for account management and technical support. If changes occur, we will inform you accordingly. Will the terms and conditions of existing customer contracts be impacted by the merger? As of today, the terms and conditions of contracts will be fully respected. Once the integration process is underway, there will be efforts to harmonize contracts (where necessary). If any changes occur, it will be done in collaboration with our channel partners and customers. Will the software of the platform that I am using today be maintained and continue to have upgrades in the future? As of today, all platforms, devices and applications will continue to be maintained. Unless we have previously announced otherwise, we do not intend to discontinue products from our portfolio while there continues to be market interest and demand. Our goal continues to be to provide our customers with the technology they need to be successful today as well as a nondisruptive path to next generation products for customers to follow at their own pace and preference. If current products are discontinued, how much advanced notice will be given? Existing products within the portfolio will not be abruptly discontinued. Unless we have previously announced otherwise, the company will continue to maintain the existing platforms, products and devices as we evaluate the portfolio and address region-specific requirements. Throughout the integration process, we intend to maintain the each company s customernotification period. Will pricing be impacted? No, pricing will not be immediately impacted by the merger. Mitel s pricing has traditionally been driven by the market and each product s level of functionality and we will continue to follow this model going forward. 5
Who do I contact if I have additional questions? Please continue to contact your current account management representative. As additional information becomes available, we will communicate this to you through your traditional channels. 6