Canada’s Nortel Networks has agreed to sell its CVAS unit to Genband in a US$182m deal.
Nortel entered Chapter 11 bankruptcy protection in January 2009 and has since been selling off assets in a bid to raise funds for creditors. The Carrier VoIP and…
Canada’s Nortel Networks has agreed to sell its CVAS unit to Genband in a US$182m deal.
Nortel entered Chapter 11 bankruptcy protection in January 2009 and has since been selling off assets in a bid to raise funds for creditors. The Carrier VoIP and Application Solutions business (CVAS) was the last major unit to be sold off, and Nortel has now raised over US$3bn in asset sales.
Nortel had scheduled an auction for the asset today, Thursday February 25, but as no other bidders emerged to bid against Genband’s stalking-horse offer, Nortel sold the asset to Genband. Auction bids were due February 23.
Nortel states that it is working towards a Q2 2010 closing of the asset sale agreement for a purchase price of US$282m subject to balance sheet and other adjustments currently estimated at US$100m for a net purchase price of approximately US$182m.
US and Canadian court approvals of the sale will be sought at a joint hearing on March 3.
Genband’s purchase will include all product platforms, all patents predominantly used and other IP exclusively used in Nortel’s CVAS business, including softswitching, gateways, SIP applications and TDM products and services, as well as the transition of substantially all of Nortel’s CVAS customer contracts to Genband.
Genband has teamed with One Equity Partners and other existing shareholders to secure the Nortel CVAS assets.
Samih Elhage, president, CVAS, Nortel, said, “Uniting our two businesses will create one of the industry’s strongest Carrier VoIP players, in terms of market share, customer base and portfolio. Joining forces with GENBAND will allow us to continue to provide a highly reliable solution and service offering to service providers and enterprises across the globe.
Nortel stated that it does not expect that its common shareholders or the NNL preferred shareholders will receive any value from the creditor protection proceedings and expects that the proceedings will result in the cancellation of these equity interests.
Genband is based in Texas and is a vendor of voice over internet protocol gear. The acquisition is being made with One Equity Partners, of one the Genband shareholders, which manages investments for JP Morgan Chase.
