Yes Or No - Is Avaya For Sale?
May 29, 2007 | by Christopher Nickson
Telecom company Avaya might be selling some or all of itself. Or maybe it won't.
Rumors are flying that telecom company Avaya might be selling all or part of itself. Or, then again, it might not.
Valued at a cool $6.1 billion, the company has raised the interest of Cisco Systems, Nortel Networks and Silverlake Partners, an equity company. Avaya has brought Credit Suisse on board as an adviser.
Going back, Avaya, one of the main manufacturers of phone equipment, was part of AT&T, then Lucent Technologies, becoming independent in 2000. It currently employs some 20,000 people. In its most recent fiscal year figures, Avaya’s turnover was $5.12 billion, generating a profit of $201 million.
Analysts had identified the company as a strong buyout target, and with the amount of activity going on in the telecom sector, it’s quite possible. Speculation grew after the company canceled a meeting with analysts last week. According to one analyst,
“I would guess there is an offer on the table. Given the cash flows, it could be private equity, but also there are a number of other strategic buyers that could be interested.”
The fact that the company is also debt-free makes it especially attractive to potential buyers. However, according to company executives, any negotiations that might be happening were in the early stages, and there was a strong possibility that the company would remain independent. Last year it was believe that Avaya would buy Siemens, but that never happened.
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