Avaya Files for $1 Billion IPO

 
 
By Jeffrey Burt  |  Posted 2011-06-09
 
 
 

Avaya officials have filed the necessary papers for a $1 billion IPO following two days of speculation.

The Wall Street Journal had reported June 7 that Avaya, a networking and communications technology vendor, was preparing to go public again, taking advantage of a newly energized IPO market buoyed by the likes of LinkedIn and Groupon.

Avaya officials late June 9 announced that they had filed the paperwork with the Securities and Exchange Commission seeking to sell $1 billion worth of stock in the company. Analysts had said the IPO would be about 20 percent of the company's worth, putting the overall value of Avaya at about $5 billion.

According to Avaya, the company will use some of that $1 billion to pay down long-term debt, among other things.

The company issued a release, but a spokesperson said Avaya executives would not comment further on the IPO.

Handling the public offering will be Morgan Stanley & Co., Goldman, Sachs & Co., J.P. Morgan Securities, Citigroup Global Markets, Deutsche Bank Securities, BofA Merrill Lynch, Barclays Capital, UBS Investment Bank and Credit Suisse Securities.

Avaya initially was part of AT&T, and then part of Lucent Technologies when AT&T spun off that company. Avaya became its own company when it spun off from Lucent in 2000, when it was listed on the New York Stock Exchange. Venture capitalist firms Silver Lake and TPG Capital bought the company for $8.3 billion in 2007, and took it private.

Avaya has aggressively built up its networking and communications offerings, including through its $915 million acquisition in late 2009 of bankrupt Nortel Network's enterprise business unit, which enabled it to overtake Cisco Systems as the world's top vendor of enterprise telephony technology. Over the past couple of years, Avaya also has launched a range of products, including Aura, its broad unified communications platform.

In addition, Avaya actively pursued partnerships, including with Hewlett-Packard, IBM, Polycom and Skype.

The Wall Street Journal reported that although Avaya's revenue had grown 24 percent in the six months that ended March 31, it saw its losses grow as well, from $421 million a year earlier to $615 million this year.

Rocket Fuel