Avaya Inc. (AV) has signed agreements to purchase Nortel
Networks Corp.'s (NRTLQ) enterprise solutions business for $475
million.
The proposed acquisition includes the Nortel Enterprise
Solutions voice, data and government systems businesses.
The sale of Nortel's enterprise solutions business follows the
sale last month of part of its carrier network division, together
with a research operation, for $650 million to Nokia Siemens
Networks, a joint venture between Nokia Corp. (NOK) and Siemens AG
(SI).
At the time, analysts said the company set a low bar for future
deals by selling its carrier network operations for the equivalent
of a year's earnings from the unit.
As reported, Nortel's enterprise unit attracted preliminary bids
of around $1 billion last year, before the company entered
bankruptcy proceedings.
Avaya said it expects the acquisition will increase its global
scale, expand its channel partner network, and strengthen its
portfolio of products and services. The transaction is subject to a
competitive bidding process and requires the approval of the U.S.
Bankruptcy Court for the District of Delaware and the Ontario
Superior Court of Justice. Avaya expects that hearings before those
courts to approve bidding procedures will be held within the next
couple of weeks, followed by an auction, with hearings for approval
of the ultimate sale to be held thereafter.
-By Tara Zachariah, Dow Jones Newswires; 416-306-2100;
tara.zachariah@dowjones.com