PRESS RELEASE: Avaya announced it has entered into an asset purchase agreement with Extreme Networks, Inc. (Nasdaq: EXTR) (“Extreme”) under which Extreme will serve as the primary bidder in a section 363 sale under the Bankruptcy Code to acquire Avaya’s Networking business for a transaction value of approximately $100 million, subject to adjustments.
“Several months ago, in the context of optimizing our capital structure, we announced that we were conducting a comprehensive assessment of the various alternatives available to us, including expressions of interest in certain Avaya assets,” said Kevin Kennedy, president and CEO of Avaya. “After extensive evaluation, we believe that a sale of our Networking business is the best path forward for all stakeholders. It provides a clear and positive path for our Networking customers and partners and enables the Company to focus on its core, industry-leading Unified Communications and Contact Center solutions. Today’s announcement furthers our overall restructuring goals as we position the rest of Avaya for long-term success.”
Kennedy continued, “The possibility of Avaya Networking being part of a pure-play networking company like Extreme Networks would allow greater opportunities for its products and services to thrive and the industry to continue to benefit from our award-winning wired, WLAN and Fabric technology.”
The sale process will be administered by the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) and governed by the United States Bankruptcy Code. Other interested parties will be provided the opportunity to submit bids prior to a deadline set by the Bankruptcy Court. If other qualified bids are submitted, an auction process will be conducted, in which the agreement with Extreme would set the floor value for the auction. Approval of a final sale to either Extreme or a competing bidder is expected to take place shortly after completion of an auction. The transaction is expected to close by June 30, 2017, the end of Avaya’s fiscal third quarter 2017, subject to regulatory approvals and other customary closing conditions.