VOIP Shakup Looms As Avaya Sold

11 June 2007

For years Awaya had the VOIP market to themselves. Now only days after Cisco via their 100% owned subsidary Linksys have rolled out a sub $1,500 VOIP solution Avaya has been acquired in an $8.2 billion private equity purchase by Silver Lake, an investment firm focused on large-scale investments in technology-driven growth industries, and TPG Capital, a private investment partnership.

The deal amounts to $17.50 per common share, which Avaya shareholders will receive in cash—approximately 28 percent over Avaya's closing share price of $13.67 on May 25, when reports were published regarding a possible buyout. The board of directors of Avaya has approved the buyout, suggesting that the company's shareholders do the same.

The $8.2 billion deal to take telecommunications equipment maker Avaya private raises questions about the future of rival Nortel Networks and a collection of smaller gears that are finding it increasingly challenging to compete with Avaya...