Monday, 25 March 2019 08:36

Avaya looking at another leveraged buyout: report

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Avaya looking at another leveraged buyout: report Image by mohamed Hassan from Pixabay

Unified communications vendor Avaya is looking at a leveraged buyout offer from a private equity company with its value, inclusive of debt, being put at about US$5 billion, the news agency Reuters has reported.

The company emerged from Chapter 11 bankruptcy in December 2017, having completed its debt reconstruction plan, as iTWire  reported.

The exit from Chapter 11, which Avaya moved into in January the same year, was effected at a time when it had about US$6 billion in debt which it planned to cut down to US$2.9 billion. The debt was a hangover from its previous leveraged buyout by private firms TPG Capital and Silver Lake who paid US$8.3 billion for the firm in 2007.

After it emerged from Chapter 11, Avaya acquired contact centre-as-a-service provider, Spoken Communications.

It also entered into a strategic partnership with Afiniti, a provider of AI-based behavioural pairing solutions, to improve enterprise customer experience and contact centre performance through integration of artificial intelligence into contact centre routing technology.

Another deal the company made was to supply contact centre technology and provide services to the Australian Department of Defence.

The current offer is for less than US$20 per share and with the price standing at US$13.21 at the end of trading on Friday, that would give a market capitalisation of US$1.5 billion. Avaya had US$3.2 billion in debt at the end of 2018.

Last month, the company's first quarter 2019 results showed a drop in revenue year-on-year, from US$752 million to US$738 million.

Avaya is a big provider of telephony systems. It was a part of Lucent Technologies and became a separate unit in 2000.

Contacted for comment, an Avaya spokesman said: "We do not comment on rumours or speculation."

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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