GENBAND bids on Nortel's CVAS

Right on the heels of the Avaya-Nortel deal that saw the Enterprise Solutions unit change hands, GENBAND has stepped up with a 'stalking horse' bid for Nortel's CVAS unit.

In conjunction with its shareholder One Equity Partners, GENBAND is offering a purchase price for the CVAS unit is $282 million, but the "total cost of ownership [is] in excess of $400 million." The bid encompasses Nortel's CVAS business in four regions: North America, Caribbean, Latin America and Asia. In a separate asset-sale purchase GENBAND will acquire all of Nortel's CVAS assets in Europe, Middle East and Africa for $282 million, subject to balance sheet and other adjustments currently estimated at approximately $100 million.

Joe McGarvey, Principal Analyst at Current Analysis said that from GENBAND's perspective while the proposed acquisition is consistent with the company's drive to add more assets to its portfolio, he believes the value depends on what GENBAND takes or does not take from CVAS.
  
"There's a lot of pieces in the CVAS portfolio, some of which would be valuable to GENBAND and some of which might create conflicts or overlap," he said. "As an example of the former, Nortel's CS 1500 appears to open up opportunities in the North American rural market, as a Class 5 alternative. At the same time, however, GENBAND had already acquired--and divested--similar assets: the T7000 Class 5 switch it acquired with the purchase of Tekelec's switching unit."

GENBAND may be the first to make a bid on Nortel's CVAS unit, but with CVAS including AT&T and Verizon as customers, others will likley follow. The same potential bidders for MEN and ES, including Nokia Siemens Networks, NEC and Sonus Networks, are the most likely suspects to emerge with a competing bid for the CVAS unit.

Nortel's CVAS led globally in the total VoIP market and provided for 61 percent of the North American softswitch market in Q3 2009 according to Infonetics.

For more:
- see the article [1]

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