Business VoIP Featured Article

Avaya Gearing Up to Go Private Once Again?

March 26, 2019

By Laura Stotler, Business VoIP Contributing Editor

Avaya may be gearing up for another ride on the public/private company merry-go-round following a leveraged buyout offer from a private equity firm. Reports this week indicate the beleaguered unified communications (UC) and VoIP giant is considering an offer of more than $5 billion, which would include absorption of the company’s substantial $3.2 billion debt.

To liken Avaya’s 19-year existence to an amusement park ride would be an understatement. Spun off from Lucent Technologies as a public company in 2000, Avaya maintained a strong presence in the UC, CRM and contact center space through 2007, when it was purchased by private equity firms for $8.2 billion and delisted from the NYSE. The company once again went public in 2011, acquiring major VoIP players Radvision, Aurix and Sipera Systems around that time.

By 2017 the company was struggling again and filed for Chapter 11 bankruptcy as well as selling off its Extreme Networks networking assets for $100 million. By early 2018, Avaya had emerged from bankruptcy and has been focusing heavily on cloud-based offerings and subscription services like UCaaS and Contact Center as a Service. Even so, the company still maintains significant debt, making a private buyout and escape from the demands of shareholders particularly appealing.

Avaya has not publicly commented on the buyout rumors, nor has the name of the private equity firm been revealed. There has been speculation that the information was circulated in an effort to drive up the buyout price, with the current offer valued at $20 per share. The news has certainly helped Avaya, since the company’s stock jumped from a $13.21 closing price last Friday to $17.64 on Monday, a 33.5-percent boost.

On the customer side, Avaya made a slew of announcements last week, all geared toward promotion of its cloud and subscription-heavy business model. A new cloud transformation program is designed to help companies efficiently migrate to Avaya OneCloud solutions for public, private and hybrid communications scenarios. The company also announced integration with Google Cloud Contact Center AI, aiming to offer better interactions for customers and boost workforce efficiencies. Last week, Avaya also reported increased adoption of its cloud offerings across a wide range of vertical markets, with the company boasting 3.7 million cloud seats among its public and private customers.

It will be interesting to see if additional private offers come in based on the hype and rising stock price. If historical behavior is any indication, it looks like Avaya may be ready to once again become a privately held company.

Edited by Maurice Nagle



Key Benefits

  Unlimited Calling & Faxing
  Number Portability
  Auto Attendant
  Instant Conference Calls
  HD Voice Quality