Nortel Networks has agreed to sell the bulk of its carrier VoIP and application solutions business(CVAS) globally to IP products provider Genband for $282 million (€196 million).
The "stalking horse" asset sale agreement with Genband, includes most of the assets of the Europe, Middle East and Africa (EMEA) portion of its CVAS business including softswitching, gateways and SIP applications. These agreements also include all patents and intellectual property that are predominantly used in the CVAS business.
Under the transaction, Genband has offered "a significant majority" of the division's employees a career lifeline with continued employment. The Texas based Genband said it would expand its operation in North Carolina and in Canada, where Nortel has headquarters.
The unit, has 2,200 workers globally and 1,100 in the US.
Nortel's CVAS business president Samih Elhage,said “the proposed transaction represents a clear and positive step forward for Nortel's CVAS customers, employees, and business. Today's news is also a testament to our employees, whose commitment to innovation and customer support has ensured our growth in market share in 2009 despite a challenging economy."
Genband has teamed with existing shareholders, One Equity Partners to assist in financing the proposed purchase of Nortel's CVAS assets.
In early January, Nortel expects to seek US. and Canadian court approvals for bidding procedures, including a bid deadline and tentative auction date. To qualify as the winning bid, Genband's opening bid will have to withstand competing offers.