Bankrupt Avaya enters asset purchase agreement - ANZ MD assures partners
In January this year Avaya filed for bankruptcy under chapter 11 in the United States in a move the networking vendor reported would better position itself for the future.
Today the company announced it has entered into an asset purchase agreement with Extreme Networks.
Extreme will serve as the primary bidder in a section 363 sale under the Bankruptcy Code to acquire Avaya's Networking business for a transaction value of approximately $100 million, subject to adjustments.
When Avaya announced it had commenced formal proceedings to restructure its balance sheet in January this year, president and CEO of the company, Kevin Kennedy declared they were conducting a comprehensive assessment of the various alternatives available to them, including expressions of interest in certain Avaya assets.
"After extensive evaluation, we believe that a sale of our Networking business is the best path forward for all stakeholders," says Kennedy. "It provides a clear and positive path for our Networking customers and partners and enables the Company to focus on its core, industry-leading Unified Communications and Contact Centre solutions.
Kennedy asserts that today's announcement furthers their overall restructuring goals as they position the rest of Avaya for long-term success.
"The possibility of Avaya Networking being part of a pure-play networking company like Extreme Networks would allow greater opportunities for its products and services to thrive and the industry to continue to benefit from our award-winning wired, WLAN and Fabric technology," Kennedy says,
And so what does that mean for ANZ?
The completion of the transaction is subject to an auction process during which other companies may bid for Avaya's networking business, and is expected to close by June 30, 2017.
Managing director for ANZ at Avaya, Peter Chidiac says despite this tumultuous time, it will be business as usual.
"While we understand this announcement may cause uncertainty in the market, we want to assure our Australian and New Zealand customers and partners there will be no change to the way we interact with and support them during the sale and ultimate transition process," Chidiac says.
"Since May 2016, Avaya Inc. has been carefully evaluating the best options to improve its balance sheet. This is the next step of that process.
Chidiac says Avaya has been carefully going over the best options to improve its balance sheet since May 2016, and this is the next step in that process.
"Avaya has and continues to approach the sale with stringent criteria to ensure our networking customers, and the industry-leading technology we have developed, are protected. We believe Extreme Networks can provide safe hands for our networking customers and partners," Chidiac concludes.
