Avaya has emerged victorious from the protracted bidding process for Nortel's enterprise unit, walking away with the prize after forking out $900m with an additional pool of $15m for employee retention.
Thedeal includes Nortel's principle subsidiary Nortel Networks Ltd, NortelNetworks Inc, Nortel Networks UK Ltd and shares of Nortel GovernmentSolutions Inc and DiamondWare Ltd.
The auction of the showcase unit was supposed to havebeen a done deal last Friday, but as of Sunday evening 'undisclosed issues'were holding up the process.
Nortel social media manager Bo Gowan, who has been keeping audiencesup to date on the auction via his Twitter feed, said late Sunday that theauction would resume on Monday morning, and this process has now completed.
By the end of last week the number of bidders had beennarrowed down to two; Avaya, which bid $475m in a stalking horse deal, andSiemens Enterprise Communications (SEC), which was keen to expand its North American presence.
Avaya will benefit hugely from adding Nortel's assetsto its own; it would dearly love to mount a concerted challenge toCisco. The deal is also something of a family reunion, as both partiestrace their ancestry back to former North American comms behemoth Bell.
However, US comms and mobile network provider and Nortelreseller Verizon has publicly objected to the sale, although it is unclearwhether or not this is what held up the auction.
Citing concerns largely around public safety and security, thefirm claimed Avaya was refusing to honour contracts with Verizon customers,which include the USmilitary, anti-terrorism agencies and the Congress.
"So integral are (Nortel's) CPE products and services tothese critical communications systems, in fact, that if they fail to operate -due to a lack of maintenance or repair, the inability to obtain spare parts orsoftware fixes, or for some similar reason - entire systems will immediately bedisrupted or otherwise compromised, and in due time may cease to functionentirely," said its lawyers.
Verizonwas in negotiations with Avaya over its concerns last week, and it isexpected will now lodge formal objections to the sale.
Avayapresident and CEO, Kevin Kennedy, said: "Our successful bid brings uscloser to adding Nortel and its complementary channel, portfolio,R&D and global presence to Avaya."
He continued: "We believe the acquisition brings inherent value to both organisations' customers, employees and partners."
Nortelenterprise solutions president Joel Hackney added: "This will empowerus to continue to deliver industry-leading solutions and services. Itprovides the capability to chart our future with laser-focus, enablingcustomers to compete in new ways with greater scale and resources."
Commentingon the implications for the Nortel channel, Rick Dawybida, president ofthe US-based Nortel Distributor Alliance Council said the channel was"excited" and hinted that he "looked forward to a commitment focused onensuring customers can fully leverage their prior investments".