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25 Feb 2010
Nortel has pulled the plug on the auction for its Carrier VoIP and Application Solutions (CVAS) arm, handing the unit to sole bidder Genband for a cut-price $182m (£118m).
A stalking-horse agreement with Texas-based Genband was announced two months ago, but interest from other suitors has failed to materialise since. The agreed purchase price is $282m, but this is expected to drop by $100m, subject to adjustments.
The deal covers all product platforms and intellectual property, as well as the entire CVAS customer base. Genband is working with investment firm One Equity Partners and other shareholders to fund the acquisition.
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Approval from US, Israeli and Canadian courts will be sought in the coming weeks and the deal is expected to close in 2010's second quarter. CVAS president Samih Elhage indicated that "a significant majority" of staff will be able to keep their jobs.
The CVAS unit is one of the last major Nortel businesses to find a buyer, despite reports surfacing almost a year ago that Genband was interested in a buy-out. Elhage claimed that his firm would enjoy a bright future under its new ownership.
"Uniting our two businesses will create one of the industry's strongest carrier VoIP players, in terms of market share, customer base and portfolio," he said. "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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