ShoreTel Inc. announced Monday it completed the acquisition of M5 Networks on March 23, adding M5s hosted UC services to ShoreTel’s on-premises solutions and speeding its entry into the cloud services space.

M5 will operate as the ShoreTel Cloud Division and will be  based in New York and led by former M5 CEO Dan Hoffman, who will be its president and general manager. ShoreTel is acquiring M5s entire operation, including its customer base, distribution capability and proprietary network.

The terms of the deal, announced in February, call for M5 shareholders to receive $84 million in cash and 9.5 million shares of ShoreTel stock. ShoreTel said the deal is worth $146.3 million based on its average stock price over the prior 30 trading days. There is another potential carrot for M5 shareholders: They will receive up to $13.7 million over a two-year period after the agreement closes if certain revenue performance milestones are achieved for the year ending Dec. 31, 2012.

Purchasing an established provider of hosted communications and contact center services is a game-changing move that promises to differentiate ShoreTel significantly from its traditional competitors in the market for UC and contact center solutions,” said analyst Brian Riggs of Current Analysis in a press statement.

ShoreTel is based in Sunnyvale, Calif., and has regional offices in Austin, Texas; New York, New York; Maidenhead, United Kingdom; Sydney, Australia; and Singapore.