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February 23, 2010

Nortel to sell CVAS unit to Genband for $282m

Includes softswitching, gateways and SIP applications

By CBR Staff Writer

Nortel Networks has abandoned plans to auction its Carrier VoIP and Application Solutions Business (CVAS) and agreed to sell the business to the staking horse bidder Genband.

The agreements, announced in December, provide for the sale of substantially all of the global assets of Nortel’s CVAS business for a purchase price of $282m, subject to balance sheet and other adjustments estimated at approximately $100m for a net purchase price of approximately $182m.

Under the terms of the agreements, Genband’s purchase will include substantially all product platforms, all patents predominantly used, and other IP exclusively used in Nortel’s CVAS business, including softswitching, gateways, SIP applications, and TDM products and services. The agreement will also provide for the transition of substantially all of Nortel’s CVAS customer contracts to Genband.

Samih Elhage, president of CVAS at Nortel, said: Uniting our two businesses will create one of the industry’s strongest Carrier VoIP players, in terms of market share, customer base and portfolio. Joining forces with Genband will allow us to continue to provide a highly reliable solution and service offering to service providers and enterprises across the globe.

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On closing of the transaction, Genband claims that it will have enhanced research and development, sales and support operations. It will also have products deployed with over two-thirds of the world’s top 100 service providers and will cover markets including fixed, mobile, cable and broadband operators.

Genband said that it will continue its commitment to existing business partnerships with plans to expand product, service and support relationships following the close of the Nortel CVAS transaction.

Charles Vogt, president and chief executive officer of Genband, said: “By melding these market-leading technologies into Genband, we will create the most comprehensive, standards-based switching portfolio in the world.”

The acquisition is subject to court and certain regulatory approvals in Canada, the United States and other jurisdictions, as well as other closing conditions.

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