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September 14, 2009

AVAYA News - Avaya Wins Bid in Nortel Auction

By Susan J. Campbell, TMCnet Contributing Editor

Avaya has announced that the rumors swarming around the telecommunications industry have finally been proven true: the company has been selected to acquire Nortel Enterprise Solutions for $900 million.

Nortel (News - Alert) will receive the proceeds, while an additional pool of $15 million has been reserved for an employee retention program. This announcement is the result of the completion of an auction to transfer Nortel to the highest bidder. The transaction is subject to customary regulatory approvals in Canada and U.S.

“Our successful bid brings us closer to adding Nortel and its complementary channel, portfolio, research and development, and global presence to Avaya (News - Alert),” said Kevin Kennedy, president and CEO, Avaya, in a statement. “We believe the acquisition brings inherent value to both organizations’ customers, employees and partners, and we look forward to its successful conclusion.”

The transaction will consist of the transfer of Nortel Networks Corporation’s Nortel Networks Limited and certain of its other subsidiaries, such as Nortel Networks Inc. and Nortel Networks UK Limited. Avaya will gain ownership of nearly all of the assets of Nortel’s global Enterprise Solutions business, in addition to shares of Nortel Government Solutions Incorporated and DiamondWare (News - Alert), Ltd. Avaya Inc.

Nortel Enterprise Solutions President Joel Hackney said, “As we work through integration planning, it is business as usual, and we will continue to focus on supporting our installed base. Through deal close and beyond, we will deliver on our stated customer commitments and maintain high levels of service and support. 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.”

Avaya and Nortel offer complementary strengths in the U.S. federal government market. The combined operations are expected to yield a company best-suited to address the unique information technology requirements of the civil government and military.

Noted Chuck Saffell, CEO of Nortel Government Solutions (News - Alert), said, “With our combined knowledge of the federal market, we will be focused on delivering the best-performing, most cost-effective capabilities available to support our customers' mission. Our goal continues to be helping our customers provide security, livelihood and well-being for the citizens of the United States.”

Both Avaya and Nortel believe that customers and partners will benefit from this transaction. Customers should benefit from the extension of product lines and capabilities. Partners will have opportunities to grow their businesses as the demand for unified communications continues to grow, in addition to the expansion of advanced and managed services.

“The independent members of the Nortel Distributor Alliance Council are excited about the future potential that today's announcement brings to the tens of thousands of enterprise customers we support,” said Rick Dawybida, President of DAC Americas. “We look forward to a commitment focused on ensuring customers can fully leverage their prior investments while also getting expanded choices. The combined portfolio capability of Avaya and Nortel will offer the marketplace industry-leading solutions as companies move aggressively to unified communications.”

Avaya was in the headlines last week as the company had selected SIP Print for membership in the Avaya DevConnect (News - Alert) program. Membership in the program communicates to potential customers the level of expertise and reach SIP Print can offer in the industry.
This transaction will be a significant gain for Avaya as Nortel has long dominated much of the market. In its prime, the company claimed the number one slot for media gateway port shipments, as well as a substantial global base. The market is sure to be hopping over this announcement as the future certainly is looking to be very promising for Avaya.

Don’t forget to check out TMCnet’s White Paper Library, which provides a selection of in-depth information on relevant topics affecting the IP Communications industry. The library offers white papers, case studies and other documents which are free to registered users.

Susan J. Campbell is a contributing editor for TMCnet and has also written for To read more of Susan’s articles, please visit her columnist page.

Edited by Erin Harrison

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