Tag Archive for Private equity

| March 26, 2019
Comments Off on Avaya LBO Buzz

Avaya LBO Buzz

Avaya is back in the news. Followers of the Bach Seat will recall that Avaya declared bankruptcy in 2017. Now the buzz is that Santa Clara, California-based telecommunications equipment and software firm is considering a leveraged buyout offer.

Avaya logoReports are circulating that Avaya’s (AVYA) board of directors is evaluating an offer from an unnamed private equity firm. Reportedly the offer values the Lucent spinoff at more than $20 per share, people in the know told Reuters. The private equity firm values Avaya at more than $5 billion, including $3.2 billion in debt.

Avaya is one of the world’s largest providers of telephony systems. It was spun off from Lucent Technologies Inc in 2000, which used to be part of AT&T (T). The LBO comes 15 months after Avaya emerged from bankruptcy protection, with a $8.3 billion debt legacy from a previous leveraged buyout by private equity firms TPG Capital and Silver Lake in 2007.

unified communications as a serviceAvaya has tried to shift its revenue model to focus on cloud-based communications solutions with recurring software and subscriptions fees and not its traditional hardware business. Its legacy business is becoming more commoditized and dated. Much of Avaya’s new focus involves cloud services like unified communications as a service (UCaaS) and Contact Center as a Service (CCaaS). A new Device as a Service (DaaS) offering has also surfaced.

Avaya’s contact center business has also attracted acquisition interest in the past from private equity firms, including Clayton Dubilier & Rice LLC, Hellman & Friedman LLC, and Permira Advisers LLP. Hellman & Friedman and Permira own Genesys an Avaya competitor.

As of September 2018, Avaya had about 8,100 employees worldwide, including 2,800 in the U.S.

Private equity firms have recently focused on communications businesses. Among those companies are Aspect Software, Mitel,  and PGi, each privately held by such firms. Note, too, that Polycom had been a Siris Capital property until its recent acquisition by Plantronics.

Related articles

 

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.

Category: Uncategorized | Tags: , , , , , , , , , , , , ,
| September 27, 2010
One comment

PAETEC Buys Again

PAETEC Buys AgainPAETEC has expanded again. PAETEC Holding Corp.(PAET) recently announced that it has signed an agreement to acquire Cavalier Telephone Corporation. The acquisition will add Cavalier’s wholly-owned subsidiary, Intellifiber Networks’ fiber-optic network to PAETEC’s existing service footprint.

Intellifiber Networks is Intellifiber Networks logoone of the largest network providers in the nation with a high-capacity fiber network spanning nearly 17,000 route miles and representing over $2 billion of investment. The expansive 12,262 route mile intercity network spans the Midwest and Eastern U.S., as well as 4,689 route miles throughout several existing PAETEC metro areas,  allowing for broad connectivity options for customers. Intellifiber offers scalable network solutions for service provider, enterprise, and government customers. Their offerings include private networks, low latency routing, SONET services, wavelengths, Ethernet, and data options.

The expanded PAETEC fiber network will encompass a combined 10,609 metro fiber-route miles and 37,023 total fiber-route miles and a combined 1,178 collocations. After the closing of this transaction, PAETEC expects to have a local presence in 86 of the top 100 Metropolitan Statistical Areas (MSAs). The transaction will further solidify PAETEC as one of the largest competitive local communication service providers in the United States

PAETEC logoMarketWatch reports PAETEC Holding Corp. will acquire Cavalier Telephone Corporation in an all-cash $460 million transaction. Cavalier will become an indirect wholly-owned subsidiary of PAETEC Holding Corp. Cavalier is a privately held company whose majority owner is M/C Venture Partners, a private equity firm based in Boston.

“This planned acquisition of Cavalier fits our strategic plan to add both fiber assets and regional density to better serve our customers and realize increased network synergies, both in the local loop and long haul,” Arunas A. Chesonis, chair, and CEO of PAETEC told MarketWatch. “Cavalier’s fiber infrastructure, network assets, and corporate culture make it a perfect match for PAETEC and dramatically strengthen the company in the Eastern United States.”

 

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.

Category: Uncategorized | Tags: , , , , , , ,
| October 15, 2009
Comments Off on Brocade Selling Itself

Brocade Selling Itself

Brocade Selling ItselfChannelInsider citing the Wall Street Journal is reporting that network equipment maker Brocade Communications Systems Inc. put itself up for sale on 10-05-09. The paper, citing people familiar with the matter, said Oracle and Hewlett-Packard were potential bidders for the company, but a deal was not imminent and Brocade may not even go ahead with a sale. Oracle CEO Larry Ellison told investors at Oracle’s annual shareholder conference Wednesday. “We have no interest in buying Brocade,” in response to a question from an investor according to Fortune.

Data centerTo compete with much bigger rival Cisco Systems Inc, the company has been bolstering sales partnerships with large technology vendors such as IBM and Dell to expand their customer reach. In an interview with Reuters last month, Brocade Chief Executive Michael Klayko had said he did not see a need for Brocade to merge with or acquire another company, citing the company’s expertise and partnerships.

However, Goldman Sachs analyst Min Park told Fortune, interest in Brocade is picking up, “Brocade is a likely strategic fit for a number of potential acquirers.” He includes Hewlett Packard, Juniper, Dell, IBM, and Oracle among those interested in Brocade.

rb-

It is unlikely that Dell will purchase Brocade since Dell has Perot Systems to digest and a sales partnership with Brocade. Juniper is not in the financial position but is the most need of the product. IBM is financially capable but the hardware business seems to be losing focus at Big Blue. That leaves HP  for three reasons, first, it is financially capable, second, it is looking to grow its ProCurve business and its EDS acquisition is well underway. The wild card could be Huawei if they can get government approval. Of course, Brocade CEO Mike Klayko just may have needed some extra pocket money as the Wall Street Journal article triggering a 14 percent jump in the company’s shares. Mr. Klayko’s $5 million in options increased by $700,000 in one day.

 

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.

Category: Uncategorized | Tags: , , , , , , ,
| January 14, 2009
Comments Off on Nortel Declares Bankruptcy

Nortel Declares Bankruptcy

Chinese hackers had widespread access to Nortel's corporate computer networkUpdated 02-14-12 The Wall Street Journal reported that for nearly a decade before Nortel collapsed  Chinese hackers had widespread access to its corporate computer network.

According to the article, the hackers used seven passwords stolen from top Nortel executives, including the chief executive. The suspected Chinese hackers penetrated Nortel’s computers at least as far back as 2000 and over the years downloaded technical papers, research-and-development reports, business plans, employee emails, and other documents.

—

Updated 03-12-09 WirelessWeek is citing The Wall Street Journal is reporting that Nortel is in talks to sell its core wireless equipment business as well as a separate unit that builds telecom systems for offices, according to anonymous sources in the WSJ.

The WSJ reported that Nortel is talking to Nokia Siemens Networks, to sell its wireless business. Avaya and Siemens Enterprise Communications, a joint venture of Siemens and technology private equity firm Gores Group, are interested in the company’s enterprise unit. Cisco Systems reportedly looked at the enterprise unit but wasn’t expected to bid. Nortel declined to comment.

—

Nortel Declares Bankruptcy113-year-old Canadian technology firm Nortel filed for Chapter 11 bankruptcy today. Nortel’s losses in the third quarter ballooned to $3.41 billion and 1,300 people had to be let go. CEO and President Mike Zafirovski wrote on the company’s Website. “Most importantly, Nortel is still very much in business.”

Next steps for the former Northern Telecom may include selling various business units or receiving a capital investment as a way to go private, According to Avi Cohen, managing partner at analyst firm Avian Securities, on TheStreet.com, “The most likely bidders for Nortel’s assets are Ericsson, Huawei (002502), Nokia Siemens, and Cisco (CSCO). We believe Alcatel-Lucent (ALU) and Motorola are less likely bidders because they are struggling with their own challenges and would have a hard time financing such a purchase.”

UBS analyst Maynard Um speculated on CED that the acquisition of Nortel by Huawei would be a possible outcome giving the Chinese firm a significant increase in market access in North America. However, this scenario may run into trouble with the Committee on Foreign Investment in the U.S. (CFIUS) regulations.

 

Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.

Category: Uncategorized | Tags: , , , , , , , , , , , , , ,
  Recent Entries »