Avaya Closes Acquisition of Nortel Business Unit

Avaya has completed its $900 million acquisition of bankrupt Nortel Network’s enterprise business, a deal that analysts say will push Avaya ahead of Cisco Systems in the enterprise telephony market.

With Nortel’s Enterprise Solutions business in the fold, Avaya, which announced the closing of the deal Dec. 18, will have about 25 percent of the enterprise telephony space, compared with Cisco’s 16 percent, according to analysts.

“The completion of this acquisition represents another major step in Avaya’s evolution and growth in the communications industry," Avaya President and CEO Kevin Kennedy said in a statement. “Avaya and Nortel Enterprise Solutions share a common vision for the future of business communications.”

The deal will help Avaya grow its customer base, product portfolio and geographic reach, according to company officials. In addition, about 6,000 ex-Nortel workers will now work for Avaya.

Avaya officials plan to release more details about product road maps and other future plans within 30 days.

The enterprise business is the latest unit that Nortel has sold off in the wake of its bankruptcy filing at the beginning of the year. Company officials blamed the global recession for derailing their plans for turning around the business.

Over the past few months, Nortel has sold off a number of business units, including its CDMA (Code Division Multiple Access) wireless group, LTE (Long Term Evolution) technology and wireless technology business.

Nortel officials say that selling off the company piecemeal is the best way to ensure the future of their technology and employees.

"Maximizing the value of our businesses in the face of a consolidating global market has been our most critical priority,” Nortel President and CEO Mike Zafirovski said earlier this year. “We have determined the best way to do this is to find buyers for our businesses who can carry Nortel innovation forward, while preserving employment to the greatest extent possible."

Despite the dismantling of the company, Nortel is continuing to push its remaining businesses. The company Dec. 14 announced the first 100G optical solution, and that Verizon is deploying the offering.

Two days later, Nortel announced that Lightower, a metro fiber network and bandwidth service provider in the Northeast, ran a successful trial of Nortel’s 100G solution.