US telecom equipment maker Avaya has emerged as the successful bidder at an auction for Nortel’s Enterprise Solutions Business. Avaya will pay $900m in cash to Nortel, which is almost double compared to its initial $475m ‘stalking horse’ offer.
The companies said that Avaya will also provide an additional pool of $15m for an employee retention program. The agreement also includes the sale of shares of Nortel Government Solutions and DiamondWare businesses.
Kevin Kennedy, president and CEO of Avaya, said: Our successful bid brings us closer to adding Nortel and its complementary channel, portfolio, research and development, and global presence to Avaya. We believe the acquisition brings inherent value to both organizations’ customers, employees and partners, and we look forward to its successful conclusion.”
Earlier, Nortel has filed for bankruptcy protection in January and later decided to sell off its businesses than reorganising the company.
In July, Ericsson has won an auction for the wireless assets of Nortel Networks. It has entered into an asset purchase agreement to acquire parts of the Carrier Networks division of Nortel relating to CDMA and LTE technology in North America for $1.13 billion on a cash and debt free basis.
Joel Hackney, president of Nortel Enterprise Solutions, said: As we work through integration planning, it is business as usual, and we will continue to focus on supporting our installed base. We will ensure our customers can fully leverage their existing Nortel investment as they benefit from the complementary capabilities of the Nortel and the Avaya portfolio of products and services.
The sale is subject to regulatory approvals in the US, Canada, France and Israel, other customary closing conditions and certain post-closing purchase price adjustments. Nortel expects to close the deal in the fourth quarter of 2009.
