Private Equity Firms Snag Avaya for $8.2 Billion

By Paula Musich  |  Posted 06-05-2007

Avaya struck a deal, late June 4, to be acquired by a pair of private equity firms, Silver Lake and TPG Capital, in a deal that Avaya executives said secures the company's ability to invest in its people and technology.

The $8.2 billion merger, rumored for some time, beats out other rumored suitors, Nortel Networks and Cisco Systems and a third large communications equipment supplier, according to a Wall Street Journal report.

But whether the deal is truly done is unclear. Under the terms of the agreement, Avaya is still free to solicit and respond to unsolicited proposals from other potential suitors over the next 50 days. The existing agreement is expected to close in the fall.

Read more here about the Avaya acquisition rumors.

Terms of the deal call for Silver Lake and TGP to pay Avaya shareholders $17.50 a share, which represents a 28 percent premium over Avaya's share price before the rumors were published, and a 33 percent premium over Avaya's average closing share price 30 days prior to those published reports.

"In addition to delivering compelling value for our shareholders, the partnership with Silver Lake and TPG also creates clear value for Avaya employees and customers," said Avaya CEO Louis J. D'Ambrosio in a statement. "The investment in our people and technology and the operating structure will enable us to extend our technology and services leadership."

The Wall Street Journal report quoted D'Ambrosio pledging to remain at Avaya's helm.

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