Avaya is the chosen one. The New Jersey-based company was selected — instead of Siemens Enterprise Communications — to acquire Nortel’s Enterprise Solutions business and Diamondware, a Nortel-owned business, the company announced Monday.
Avaya will pay $900 million in cash for the voice, data and government systems businesses, exactly double the amount it agreed to pay just two months ago. Avaya also has agreed to offer an additional $15 million for an employee-retention program.
“We are excited to not only complete the process, but more importantly what this does for signaling to the marketplace, to our customers, and to our employees on the path forward,” said Nortel Enterprise Solutions President Joel Hackney in a conference call. “We believe the combination provides our current and future customers with investment protection and a clear path forward.”
“Our successful bid brings us closer to adding Nortel and its complementary channel, portfolio, research and development, and global presence to Avaya,” said Kevin Kennedy, president and CEO of Avaya. “We believe the acquisition brings inherent value to both organizations’ customers, employees and partners, and we look forward to its successful conclusion.”
While the long bidding and auction process for the Canadian telecommunications equipment maker, which was under Chapter 11 protection since January, is close to complete, the deal is still subject to regulatory approvals in the U.S. Bankruptcy Court for the District of Delaware and the Ontario Superior Court of Justice.
Hackney said regulatory proceedings will begin Sept. 15 and expects the acquisition to be complete by late December.
Avaya’s victory was no surprise. The acquisition means Avaya will expand its global reach, increase the number of partners, and increase the quality of its products and services, according to the company.
Winning the bid also allows Avaya to better compete against telecom giant Cisco Systems….