Xura Inc. (formerly Comverse), a leading provider of digital communications services, said it agreed to acquire Mitel Mobility Inc. (Mitel Mobile), a division of Ottawa, Canada-based Mitel Networks Corp (NASDAQ: MITL; TSX: MNW), and Ranzure Networks Inc. In consideration for the sale of its Mobile division, Mitel said it will receive $350 million in cash, a $35 million non-interest bearing promissory note and an equity interest in Xura.

Mitel Mobile, formerly Mavenir Systems, is a leading provider of Voice-over-Long-Term Evolution (VoLTE), Voice-over-WiFi (VoWiFi), video, Rich Communication Services (RCS), messaging, radio access and packet core solutions. Ranzure, founded by former Mavenir Systems CEO Pardeep Kohli, is an early-stage venture focused on developing 5G Cloud Radio Access Network (RAN) technology.

The move comes after New York-based private equity firm Siris Capital Group LLC acquired Xura in a $643 million going private deal completed in August.

In April, Mitel Networks agreed to acquire Polycom (NASDAQ: PLCM) in a cash and stock deal valued at $1.96 billion, but the deal was eventually terminated, and Polycom was subsequently acquired in September by Siris Capital for $2 billion, as reported by ExitHub.

The Xura Board of Directors has appointed Pardeep Kohli, formerly CEO of Mitel Mobile’s predecessor Mavenir Systems and Co-Founder and CEO of Ranzure Networks, to succeed Philippe Tartavull as CEO of Xura. Upon completion of the deal, Kohli will serve as the CEO of the combined company. Mitel Mobile President, BG Kumar, will join the management team and former CTO of AT&T and former President of AT&T Labs, Krish Prabhu, will join the Board of Directors of the combined company, which will operate from Dallas, Texas.

“Our new company will offer a fully-virtualized, software-based solution set across every layer of the mobile network infrastructure stack, including radio access, packet core and 5G applications,” said Kohli. “We will be the only pure play solution provider with no vested interest in maintaining and promoting proprietary solutions. We look forward to partnering with our customers to achieve operational efficiencies as they prepare to handle the exponential traffic growth that the industry’s IoT and 5G applications will bring.”

“Xura has undergone a significant transformation over the past two years, and in the last several months has successfully transitioned to private ownership with the backing and support of Siris Capital, a financial sponsor with deep experience and operational expertise in telecommunications,’ said Hubert de Pesquidoux, executive chairman of Xura and future executive chairman of the combined company.

“In a period of rapid change and massive technology transitions, scale and focus are key to driving growth and shareholder return. This transaction will allow Mitel to achieve these goals,” said Rich McBee, CEO of Mitel. “It also enables us to intensify our focus and capital in expanding our leadership position in the enterprise market as it prepares for large scale digital transformation of premise-based systems to the cloud.”

A global market leader in enterprise and mobile communications powering more than 2 billion business connections and 2 billion mobile subscribers, Mitel helps businesses and mobile carriers connect, collaborate and provide innovative services to their customers. The company serves more than 60 million business users in more than 100 countries.

The transactions are subject to customary closing conditions, including regulatory approvals, and are expected to close in the first quarter of 2017.

An affiliate of Xura has secured committed financing consisting of a combination of equity and debt. The equity financing will be provided by affiliates of Siris Capital Group LLC and the debt financing will be provided by a lender group led by Cerberus Business Finance LLC.

Goldman Sachs & Co. is acting as financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to Mitel in connection with the transaction. Guggenheim Securities, LLC is acting as financial advisor and Sidley Austin LLP is acting as legal advisor to Xura in connection with the transactions.

Wakefield, Mass.-based Xura offers a portfolio of digital services solutions that enable global communications across a variety of mobile devices and platforms. The company helps communication service providers (CSPs) and enterprises navigate and monetize the digital ecosystem to create innovative, new experiences through its cloud-based offerings.Its solutions touch more than three billion people through more than 350 service providers and enterprises in 140 countries.

Xura’s predecessor Comverse Inc., part of Comverse Technology, was once Israel’s flagship high-tech company. It was one of Israel’s largest employers of software engineers, and the first Israeli company to join the S&P 500 index. During 2012 and 2013, Comverse Technology divested itself of all its holdings and ceased to exist. The two independent companies that carried on its most well-known product lines are Comverse (now Xura) and Verint Systems (formerly Comverse Infosys). In 2015 Comverse had 3,000 employees, of whom 750 were located in Israel, while currently there are only 300 left in Israel. In 2015 Comverse divested its BSS business to Amdocs Ltd (NYSE: DOX) for $272 million. Last year Comverse also completed the acquisition of privately-held UK messaging firm Acision for $135 million, and entered into a joint venture with India’s Tech-Mahindra to develop an R&D center in Israel.

Siris Capital is a leading private equity firm focused on making control investments in data, telecommunications, technology and technology-enabled business service companies. Siris was founded in 2011 by Frank Baker, Peter Berger and Jeffrey Hendren who have worked together as a team since 1998 having previously been partners at Ripplewood Holdings LLC and founders of the private equity group at SAC Capital Advisors LP (Siris I). Siris has more than $2.4 billion of cumulative capital commitments, and is currently investing out of its Siris Partners III LP fund, which raised $1.8 billion of capital commitments in 2015. Its predecessor fund, Siris Partners II LP, raised in 2012, had approximately $640 million of capital commitments.

Photo: Hubert de Pesquidoux, Executive Partner at Siris Capital and Executive Chairman of Xura.

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