Under the deal — with a big “BUT” –  [...]]]>

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.

Regional CLEC Cavalier (www.cavtel.com), split-personality SureWest Communications (Northern California [...]]]>

A quick review of Metaswitch’s latest news over the past six weeks reveals that the company is racking up a lot of wins among the larger Tier 2/Tier 3 CLECs and MSOs.  And, oh by the way, has been increasing revenue at a steady pace.

Regional CLEC Cavalier (www.cavtel.com), split-personality SureWest Communications (Northern California and Kansas City), and mid-Atlantic MSO/fiber carrier RCN Communications are among the bigger names who have made recent MetaSwitch/MetaSphere announcements.  Both SureWest and RCN are big IP/fiber shops, offering a combination of business and consumer services, including voice, video, and data.

Announcing its annual results last month for its fiscal year closing on August 31, MetaSwitch announced that its overall revenue grew 4.2 percent to $113.7 million, with operating margins “sustained” above 20 percent.

Hello! MetaSwitch recorded revenue growth in a year from hell, hello!

Business came from Tier one incumbent operators and major regional providers as smaller guys slowed down between concerns over market conditions and when they’d get their hands on federal broadband stimulus pork, er funds.  MetaSwitch says 8 of the Top 10 incumbent operators in North America rely on its products for carrier VoIP infrastructure while independent analysts report the cmpany moved into the lead positon of the Class 5 segment of the global carrier VoIP market.

With Nortel in continued bankruptcy chaos, MetaSwitch is likely to see further gains over the next year. Sure, Nortel is announcing new products, but new customer growth? Mmm…