HD Voice News

Nortel Carrier VoIP division in “stalking horse” buy with GENBAND

The walking corpse of Nortel has entered into a “stalking horse” asset sale agreement with GENBAND for most of Nortel’s Carrier VoIP and Application Solutions (CVAS) business. It’s a deal that’s almost as interesting as last year’s “purchase” of Sylantro by BroadSoft. (translation = VERY).

Under the deal — with a big “BUT” –  GENBAND would shell out around $282 million in cash with help from One Equity Partners  to buy “substantially all” of the assets of Nortel’s North American, Caribbean/Latin America (CALA) and Asian (CVAS) businesses, as well as “substantially all” of the European, Middle Eastern and African (EMEA) portion of its CVAS businesses — I’m not sure what areas of the world this doesn’t include, since I don’t think there’s a Nortel NP/SP (North Pole/South Pole) division.   There’s also about $100 million in balance sheet “and other” adjustments bouncing around in the offer.

Assets GENBAND would get include Nortel’s softswitching, gateways and SIP applications, plus all patents and IP (intellectual property). According to Nortel and reported by ChannelWeb, it has shipped more than 118 million carrier VoIP and multimedia ports  including 10 million SIP ports to both wireless and wireline carriers all over the world, and it gained about 40 new carrier VoIP customers this year alone.

The big “BUT” is that this is a stalking-horse arrangement, so other companies can choose to place their own (higher) bids when the assets go up for auction in early January.

If you’re looking for the palace intrigue/things-that-make-you-go-hmm here, GENBAND was on a roll of rollups up until the credit markets got cold in the fall of 2008, with its last acquisition being a (rumored) all-stock deal for NextPoint back in September 2008.  NextPoint, the product of a merger engineered by One Equity Partners, had the number #2 share of the SBC (Session Border Controller) market back then with 14 percent — Acme Packet.

The major player in that deal was One Equity Partners, who backed the “parents” of  NextTone and and ReefPoint into the merger of NextPoint.  Exactly how much GENBAND stock was shelled out for NextPoint is unclear, but “substantial dilution” seems to be a phrase bandied about by some observers.

Now One Equity is backing GENBAND’s  “Stalking Horse” bid for Nortel’s assets. Be interesting to see what happens when real money and other players jump into the bidding process.

Be Sociable, Share!

Leave a Reply




You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>