June 5th, 2007
Avaya agrees to private equity buyout: here's what comes next
IP telecommunications systems provider Avaya says this morning that it has agreed to a buyout offer of $8.2 billion in cash, or $17.50 a share, from private equity firms TPG Capital and Silver Lake.
No surprise there. Nortel had kicked the tires and Cisco took a whiff but I felt all along that the private equity track was the most lucrative in terms of a cash-out.
Effect on enterprise VoIP? Not much may change, at least in the short term. You still have the two competitors I mentioned on the upper range of things.
But if I were in a position of financial control over Avaya, I might think of strategies to thwart competition from substantially lower priced, Asterisk flavors of managed VoIP. And that wouldn’t necessarily be a proactive mood. I say this because I see Digium, Fonality and others of that ilk ramping up to forestall intrusion into their business model by the Avaya’s of the world.
As for the transaction itself, Avaya says it should be completed by this fall.
Russell Shaw is an enterprise computing journalist, analyst and author based in Portland, Oregon. See his full profile and disclosure of his industry affiliations.
