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New Mitel CEO Mary McDowell says sale is possible, but not soon
In a move that took analysts by surprise, Mary McDowell replaced longtime chief Richard McBee as Mitel CEO -- a possible sign the company's owner is looking to sell.
Newly appointed Mitel CEO Mary McDowell plans to focus on sales and operational efficiencies that could eventually lead to a sale of the company "very far down the road."
McDowell, a veteran tech executive who served as CEO of Polycom while it was owned by a private equity firm between 2016 and 2018, replaced longtime Mitel chief Richard McBee on Monday.
McDowell joins Mitel as it nears the completion of its first year under private equity ownership. Searchlight Capital Partners acquired the previously public company for $2 billion last November.
McDowell is best known in the UC industry for turning around a financially struggling Polycom before executing a successful sale of the company to Plantronics in 2018.
Asked whether she would fulfill a similar role at Mitel, McDowell acknowledged that delivering operational efficiency was her "sweet spot" as a leader -- and part of her mandate at Mitel.
"Private equity companies don't hold anything forever," McDowell said in an interview. "Ultimately, they will be looking for, 'What is the right next phase for the company?' But that is very far down the road."
If Searchlight were looking for someone who could help sell Mitel, McDowell "would be very qualified," said Jon Arnold, founder of analyst firm J Arnold & Associates.
The executive change took industry observers by surprise, coming just two weeks after McBee had laid out Mitel's vision for the future at a summit for analysts and consultants.
Reached for comment, McBee said he had accepted a new opportunity that would be announced on Oct. 21.
"It's one of those things where the stars align," McDowell said. "Rich did what he came here to do. He got another opportunity, it isn't in this space, and so he's off to do something else."
Mary McDowellCEO, Mitel
The shakeup could indicate that Mitel's private owners feel the company has assembled a sufficiently competitive cloud portfolio, and that its managers should now focus on selling those products to its base of 70 million users, analysts said.
McBee made a reputation for himself as a technology consolidator. Most recently, he orchestrated Mitel's acquisitions of UC-as-a-service provider ShoreTel and Toshiba's UC assets.
His departure closely followed reports that Mitel had been pursuing a merger with Avaya -- a possibility that was taken off the table by Avaya's announcement of a partnership with RingCentral last week.
"You can make the case that he's kind of taken things as far as he logically can in that role for Mitel," Arnold said. "They have a pretty complete offering now. There aren't really huge holes in their portfolio."
Ironically, McDowell was on the leadership team at Siris Capital when the private equity firm derailed Mitel's agreement to acquire Polycom in 2016. Siris Capital ultimately bought the company -- getting Polycom to renege on its publicly announced deal with Mitel -- and appointed McDowell as CEO.
McDowell said she would continue to execute on Mitel's strategy of helping on-premises customers move to the cloud -- public or private -- when they are ready to do so. To that end, she feels Mitel's cloud portfolio is complete.
"The strategy remains unchanged," McDowell said. "The growth rates are really good. I don't think we need another platform, for sure."
McDowell previously held executive positions at Nokia, Hewlett-Packard, and Compaq Computer Corp. She currently serves on the boards of Autodesk, Informa, and The Committee of 200, a nonprofit that supports women in business.