Tom Sweeney

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Posts Tagged ‘Enterprise’

Nortel customers support US$915M Avaya purchase of enterprise solutions unit

Posted by sweens on September 15, 2009

By Ottawa Business Journal Staff

Mon, Sep 14, 2009 12:00 PM EST

A group representing more than 4,000 Nortel customers has praised the selection of Avaya as the winning bidder in Friday’s auction for Nortel’s enterprise solutions business, a deal which makes Avaya Inc. the top provider of unified communications services.

The International Nortel Networks Users Association expressed its support for the US$900-million cash acquisition, which will transfer to Avaya all assets of Nortel’s global enterprise solutions business, as well as the shares of Nortel Government Solutions Inc. and DiamondWare Ltd.

“We are excited to begin working with Avaya, and are ready to turn the focus back on providing our members the great education, user-driven perspectives, and other services they have come to depend on,” said the association’s executive director Victor Bohnert in a statement. “Both Nortel and Avaya have been at the forefront of delivering high-quality, innovative products to the market. With their strengths now combined, we believe the customers of both companies will be the true winners of this deal.”

As part of the deal, Avaya has also agreed to put up $15 million for an employee retention program, following an announcement that it will be hiring 2,500 former Nortel staff worldwide, with roughly 800 of those in Canada and 680 in Ottawa alone.

“This is fantastic news for our customers, as this will empower us to continue to deliver industry-leading solutions and services focused on unlocking the enterprise business potential enabled by unified communications,” said Joel Hackney, president of Nortel’s enterprise business, in a statement.

Avaya’s final bid was almost double its initial “stalking-horse” offer of $475 million, as two other unidentified rivals also entered the fray.

The company must now wait for Canadian and U.S. court approvals of the proposed sale agreement at a joint hearing on Sept. 15, with the sale expected to close late in the fourth quarter of 2009.

The transaction is facing some opposition from competitors and former Nortel partners, including Verizon Communications Inc., which has filed a suit arguing that Avaya’s purchase could leave Verizon customers in the law enforcement, anti-terrorism and national security sectors without communications network support, since Avaya is allegedly refusing to take on Verizon’s support contracts with Nortel.

Earlier media reports also said a group of telecom industry companies has complained to the U.S. Department of Justice that an Avaya-Nortel union would create an unfair “duopoly” controlling nearly 80 per cent of the enterprise market.

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